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Moore Accountancy Covid-19 Support update
There are regular updates on what support and initiatives have been given to individuals and businesses in the UK on the back of the Covid-19 pandemic.
Below is a summary of what current information is available, and we are working hard to ensure this guidance is up to date – however you should bear in mind that things may change on a daily basis as the Government respond to the ongoing situation.
Please bookmark this page for your reference to return to, in a few days. (updated 18/05/2020)
Deferral of VAT payments
Covers all VAT registered businesses
Can defer VAT payments due between 20/03/20 and 30/06/20 until the end of the tax year (i.e. March 2021), so should apply to one quarters VAT return.
Automatic offer with no applications required. Businesses will not need to make a VAT payment during this period, but will still need to submit a return as usual.
Customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. Please do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return.
Time to pay arrangements (TTP)
This is an existing scheme but HM Treasury now have a specific phone line.
This scheme allows a business to defer current tax debts, by setting up a 3-12 month payment scheme.
HMRC have made it clear that they see themselves as lender of last resort and will expect demonstration that all other finance support options have been pursued first.
Covers up to 80% of salary (max £2.5k pcm), plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage, of anyone not working, but retaining a job (i.e. not been P45d). The employees will need to be reclassed as “furloughed”.
These furloughed employees should not undertake any work including answering calls or emails, and you will need to communicate in writing with employees about what being furloughed means and why it is happening.
Wages can be backdated to 1/3/20 and has been extended to October 20. (updated 13/05/20)
From August, new flexibility will be introduced, allowing furloughed workers to be able to return to work part-time with employers being asked to pay a percentage towards the salaries. The Chancellor has said that the employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month. More specific details and information around its implementation will be made available by the end of May. (updated 13/05/20)
An employee can be furloughed for a minimum of 3 weeks. If work comes in, then employees can be taken off furlough to perform work and then re-furloughed for a minimum of 3 weeks again. (updated 31/03/20)
Will be a taxable grant, not a loan but appears to be a reimbursement by HMRC of salary costs paid to these furloughed employees, so there will be a temporary cash flow issue
For some simple questions and answers see the attached document from Knights plc
The basis in summary is the higher of the same month’s earnings from the previous year or the average monthly earnings from the 2019-20 tax year. (updated 31/03/20)
Directors – can be furloughed but only statutory duties can be carried out – no services or revenue-generating work (this only applies to the PAYE salary, not dividends)
This has been open now since 20/04/20. You will need to log on via your government gateway and choose PAYE and then make a manual submission. There is a HMRC calculator which can be used as a guide and the claim guidance is provided here .
Statutory sick pay (SSP)
Previously, SSP was payable to employees after the 3 day waiting period, and any SSP paid by an employer was not recoverable.
SSP is now payable to qualifying employees for those who are self isolating due to being vulnerable or living in a household with a with some displaying symptoms, or unwell themselves, due to COVID-19, from day 1. This applies to those employees earning at least at an average of £118pw (£120pw from 6/4/20)
The cost of SSP (£94.25 pw) can be recovered by employers with less than 250 employees, for a maximum of 2 weeks sickness per employee.
If staff can not take their full annual leave entitlement now, they can carry it over the next two years.This holiday cannot be replaced with a payment in lieu unless the worker is leaving employment.(updated 31/03/20)
The Government have not yet stated what the mechanism will be for this, but it may be via your usual monthly payroll submissions. We suggest all employers need to keep a log of sickness due to Covid-19 in anticipation. Updated guidance is here.
Deferral of SATR payments
Covers self employed and partnerships
Any 2nd payments on account due on 31/07/20 will be payable with any balancing adjustment in January 2021
This is an automatic offer with no applications required.
No penalties or interest for late payment will be charged in the deferral period.
Self-employment Income Support Scheme (CSEISS)
80% of “monthly wages” covered by the Government, for those who are already self-employed and have a SATR for 2019
Calculated using average monthly profits over the last 3 financial years, but limited to those with trading profits up to £50k a year
Support will be capped at £2.5k pm, and will initially last for 3 months
Applies for those individuals where over 50% of income comes from self employment.
Self employed will be able to receive the taxable lump sum, no later than June; but this will cause cashflow issues in the meantime
HMRC should have contacted those affected by now (middle of May), with monies to be paid out within a week of application. Look out for correspondance and start collating your taxable profits (using SA302 tax summaries) now ready for the application. (updated 13/05/20)
Extension of 2018/19 filing deadline
If you have not filed your 2018/19 SATR yet, the government have extended the deadline temporarily to 23/04/20
Penalties for late filing and late payment of tax will apply as normal.