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Get our latest updates on the COVID-19 situation
We are producing regular emails regarding the latest updates from HMRC & the government about the COVID-19 situation and how it affects your business.
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Furlough Scheme Extended and Further Economic Support announced
After this weekend’s announcement from the Prime Minister, people and businesses across the UK are being provided with additional financial support as part of the government’s plan for the next phase of its response to the coronavirus outbreak.
As part of our effort to keep our clients informed we have summarised some important updates below:
Job Retention Scheme
- The Prime Minister has announced that the government’s Coronavirus Job Retention Scheme (CJRS) – also known as the Furlough scheme – will remain open until December, with employees receiving 80% of their current salary for hours not worked, up to a maximum of £2,500.
- In addition, business premises forced to close in England are to receive grants worth up to £3,000 per month under the Local Restrictions Support Grant.
- £1.1bn is being given to Local Authorities, distributed on the basis of £20 per head, for one-off payments to enable them to support businesses more broadly.
What support is being provided and employer costs:
- For hours not worked by the employee, the government will pay 80% of wages up to a cap of £2,500. The grant must be paid to the employee in full.
- Employers will pay employer NICs and pension contributions and should continue to pay the employee for hours worked in the normal way.
- As with the current CJRS, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
- The Government will confirm shortly when claims can first be made in respect of employee wage costs during November, but there will be no gap in eligibility for support between the previously announced end-date of CJRS and this extension.
Who is eligible?
- All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.
- The government expects that publicly funded organisations will not use the scheme, as has already been the case for CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted. All other eligibility requirements apply to these employers.
- To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.
*As under the current CJRS rules:
- Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees.
- Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Such calculations will broadly follow the same methodology as currently under the CJRS.
- When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days.
- Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
- For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.
- Mortgage payment holidays will no longer end today. Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.
- The FCA will announce further information today.
Businesses required to close in England due to local or national restrictions will be eligible for the following:
- For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;
- For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;
- For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.
We’d like to remind our clients that applications for the second Self-Employment Income Support Scheme grant end soon.
Please ignore the details below if you are not self-employed or have already made a second claim using this scheme.
If you’re eligible and your business has been adversely affected on or after 14 July 2020, you must make your claim for the second grant on or before 19 October 2020.
The scheme allows you to claim a second and final taxable grant worth 70% of your average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £6,570 in total.
HMRC will calculate your eligibility for the second grant in the same way as the first grant.
You can make a claim for the second grant if you’re eligible, even if you did not make a claim for the first grant.
Your Next Steps
- Find out who can claim.
- Find out how HMRC works out your grant.
- Make your claim when the online service is available.
- Find out what happens after you’ve claimed.
We will provide details of the newly announced grant extensions when further information is published by HMRC.
Businesses are naturally concerned about cash flow, trade after lockdown and the debt associated with using the government-backed loan schemes.
R&D tax credits can help provide a quick, debt-free source of cash during these difficult times.
Any business investing in innovation, regardless of industry, can apply for tax credit relief. Our team has recently been able to assist a business in the construction industry receive a £400k claim.
If a business is attempting to create or develop an idea, product or service through its own research into something that is not simply to advance a method or product currently in place and used by them, then the business may be carrying out a qualifying activity thus eligible for R&D Tax Credits.
Some examples of activities which have been successful in R&D Tax Credit applications:
- A new flavour in the snack industry
- Changing the fermentation process in the brewing industry
- Modifying the internal production process in the health and beauty industry
To discuss this further visit: https://etpeirson.co.uk/services/tax/research-and-development-tax-claims/
The Latest Updates from the Government
The Chancellor has set out a package of temporary, timely and targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19.
The following links provide information on financial support packages for businessess, advice on how to operate your business, support for your employees, for example workers’ wage costs and information on changes to planning and regulations.