APH Accountants Covid 19 Business Support Update 09/07/2020
IGNORE THIS NEWSLETTER AT YOUR PERIL
Wow even more help from Rishi Yesterday!! Just when you think he can’t pull anything more out of the bag he does!
As we now enter into the second of three phases to kick start our economy Rishi quotes Jobs, Jobs, Jobs!
There is something for everyone in this, whether small or large, so well worth putting that kettle on, maybe even grabbing a couple of chocolate hob nobs and take 10 minutes (ok, maybe a bit longer this time) to have a read through.
Before calling/emailing or whatsapping us please take the time to read this information first as it will answer a lot of your questions and keep the phone lines free
In today’s Newsletter it’s a bit of a bumper edition and cover a lot of great support by the government – so if you don’t read it then it’s your loss! No Excuses!
- Job Retention Bonus
- What you need to know about Flexible Furlough
- Kickstart Scheme
- Cash Incentives for Apprenticeships
- Green Jobs Recovery
- Eat Out Help Out
- Stamp Duty Threshold
- Temporary VAT Reduction
- Self Employed Income Support Scheme (SEISS)
- Sustainable Innovation Fund
- Chancellor to grant “draconian” powers to reclaim millions in COVID-19 support payments
We are doing our level best to answer every single query – but if we have missed anything please do get in touch with APH Accountants Wirral. Our contact details are below.
Office Number: 0151 630 4542
Paul White: 0151 556 7247
Helen White: 0151 556 7241
Matt Newman: 0151 556 7246
Carla Ashley: 0151 556 7244
Kerry Roe: 0151 556 7240
Dave Parry: 0151 556 7245
Danielle Levy: 0151 556 7243
Katy Holmes: 0151 556 7249
Lauri Murphy: 0151 556 7248
1. Job Retention Bonus
Rishi wants to reward employers who bring back their furloughed workers over the next few months and keep them employed until 31 January 2021. If they are successful in doing this then they will receive a £1,000 bonus for each previously furloughed employee.
Criteria for the above is:
- The employee must be earning a MINIMUM of £520 per month on average for the months November 2020, December 2020 and January 2021
- They must have been previously Furloughed
- They must have been continuously employed up to 31st January 2021
When we know how to claim we will inform you, claims will be made from February 2021.
2. What you need to know about Flexible Furlough
Recap from previous announcements
- The Scheme has been extended to the 31st October
- From the 1st July, employers will be able to bring in workers part-time and pay them for the time worked and furlough them for the time they don’t
- From 1st August employers will not be able to claim the Employers National Insurance and Pensions Element of their Furlough Claims and must therefore pay for this themselves
- From 1st September Employers to also start paying 10% of the Furlough Claim – Therefore claim will be capped at £2,190 per employee per month
- From 1st October Employers to also start paying 20% of the Furlough Claim – Therefore claim will be capped at £1,875 per employee per month
If employers don’t contribute – neither will the government
How to Flexible Furlough
- Flexible furlough is only available for employees that have successfully claimed a previous grant under the furlough scheme, and for staff who have previously been furloughed for at least 3 consecutive weeks at any time between 1 March and 30 June 2020.
- In order to be eligible, the minimum 3-week period must have been completed by 30 June, while the last day an employee could have started furlough for the first time was 10 June.
- You should have a discussion with employees who you wish to place on the flexible furlough scheme, because you will need to agree the arrangements of their part time work.
- The agreement should be confirmed in writing and you must keep a written record of the agreement for 5 years (see point 4. for more details on record keeping requirements)
- You do not need to place each of your furloughed employees on flexible furlough. In addition, you can continue to fully furlough employees if you wish
- The period that you claim flexible furlough for must be for a minimum period of seven calendar days. Any flexible furlough period of less than this cannot be claimed for via the scheme.
Ready to submit your claim
- When claiming for employees who are flexibly furloughed, employers should submit the claim only when they are sure of the exact number of hours employees will have worked during the claim period. If an employer claims in advance and the employee actually ends up being furloughed for less hours than those claimed for, employers will have to pay the relevant amount back to HMRC.
- For employees who are flexibly furloughed, employers need to work out each employee’s usual hours and record the actual hours they work, as well as their furloughed hours, for each claim period. The way you calculate this will vary depending on whether the employee has fixed or variable hours.
- You or your clients can now delete a claim online within 72 hours of submitting it. Search ‘claim for wages through Coronavirus Job Retention Scheme’ on GOV.UK.
Calculating hours of work and pay
- Each employee on flexi-furlough should be paid for the hours they work, in addition to National Insurance Contributions and pension contributions for those hours.
- The scheme will allow you to recover the remainder of wages to a maximum cap. Wage caps are proportional to the hours an employee is furloughed.
- From September 2020, the amount that the scheme will cover will begin to decrease, as shown below… but only hours not worked (that would have usually been worked) can be claimed for, so if your staff are under the flexible furlough scheme, the amount you can claim for them will be less than shown below:
- July – 80% up to £2,500
- August – 80% up to £2,500
- September – 70% up to £2,187.50
- October – 60% up to £1,875
- For example, if an employee is back working part-time on the flexible furlough scheme, but working only 40% of their usual hours, they will be entitled to 60% of the £2,500 cap, as they are on furlough for 60% of their usual hours.
Fixed or variable hours? Working out usual hours for employees
- There are two different calculations you can use to work out your employee’s usual hours, depending on whether they work fixed or variable hours.
- You should work out usual hours for employees who work variable hours, if either:
- your employee is not contracted to a fixed number of hours
- your employee’s pay depends on the number of hours they work
- Where the employee’s working hours are fixed, or their pay does not vary with the amount of hours worked, the reference period for calculating their hours is the hours your employee was contracted for at the end of the last pay period ending on or before 19 March 2020.
- Where an employee works variable hours, you will use the higher of:
- the average number of hours worked in the tax year 2019 to 2020
- the corresponding calendar period in the tax year 2019 to 2020.
How will NICs and pension contributions change
- Employers will be responsible for paying all the National Insurance and pension contributions from August 2020, regardless of the employee being on flexible furlough. See below:
- July – Government
- August – Employer
- September – Employer
- October – Employer
Record Keeping Requirements
- In addition to the current record keeping requirements under the previous furlough scheme, you will also need to keep a record of the following in regard to your flexible furloughed employees (government guidance specifies that this should be kept for a minimum of 5 years):
- The number of hours the employees would usually work in the claim period
- The number of hours the employees have or will work in the claim period
- The number of hours the employees have or will be furloughed for in the claim period
- The written agreement regarding the flexible furlough hours, as set out under “legal requirements”.
- For example, you will need to record that an employee who normally works for 37 hours a week is actually working for 15 hours and is furloughed for 22 hours.
Working or training during furlough
- Like full-time furlough, during flexible furlough, employees are NOT allowed to do any work for you (or any associated organisation for that matter) during the periods that you record them as being on furlough.
- That said, employees on flexible furlough are allowed to complete training during the hours that they are recorded as being on furlough but must be paid at least national minimum wage for those hours.
Due to a number of clients requesting changes to payroll and furlough after they have been submitted, we will no longer be making furlough claims in advance of payroll.
As we have been providing the furlough claim service free of charge altering claims after the fact has caused enormous disruption to us and been costly in terms of resources.
From 1st July onwards Furlough Claims will only be made after your payroll has been confirmed and you agree with who is only furlough, the amount they are claiming and the furlough dates. This service will remain free of charge
Any subsequent changes that are required after a furlough claim has been made will incur a charge at £30 plus VAT per amendment. So please make every effort to contact us in advance of claims being made so it is done right first time and free of charge.
3. Kickstart Scheme
Rishi has urged businesses to join the job creation scheme aimed at young people.
This scheme is to help 16-24 years olds to get them into work. As the employer you will receive help towards their salary cost. This would equate to the first six months salary paid per employee on the scheme
- The employee must be working for you for a minimum of 25 hours per week
- They should be paid at least the relevant national minimum wage currently as follows
16-17 year olds £4.55
18-20 year olds £6.45
21-24 year olds £8.20
- The employer will receive 100% of the employee wages, plus national insurance contribution and auto enrolment contributions
- There will be no cap on the number of places
- In affect no cost to you the employer for 6 months
- This will be available from August
APPLICATIONS FOR THE SCHEME OPEN IN AUGUST
4. Cash Incentive for Apprenticeships
This is a bonus for all employers who take on an apprentice between 1st August 2020 and 31st January 2021.
- For each apprentice between the age of 16-24 the employer will receive £2,000
- For each apprentice over the age of 25 the employer will receive £1,500
For more information click on the link below
Employers in England who provide work experience placements for those aged 16-24 on traineeships will receive a payment of £1,000 per trainee.
For more information click on the link below
6. Green Jobs Recovery
- All landlords or homeowners can benefit from vouchers to help make their homes more energy efficient
- People on low incomes will not have to contribute towards the cost
- Other people will receive 2/3 paid for by the government
7. ‘Eat out help out’
Rishi wants us to get out and about!! Anyone see him in Wagamama maybe he will serve you 😊
- Each household will get up to 50% off all food and non-alcoholic drink at participating outlets
- The maximum is £10 per person including children
- You can go out as many times as you like and enjoy this benefit
- Only on Monday, Tuesday and Wednesday’s
- Participating businesses will need to be registered for this to be entitled to claim the money back
- The website to register will go live on Monday 13th July
- Each week in August businesses can claim back this amount and should receive it within 5 working days.
Get more information about the Eat Out to Help Out Scheme
8. Stamp Duty Threshold
The housing market did not go unnoticed, as Sunak finally took action to spur recovery in the sector.
With immediate effect, buyers in the UK are exempt from paying stamp duty on properties worth £500,000 or less. The change will affect around 90% of buyers, and will save each one an average £4,500, said Sunak. The new rates will remain in place until 31 March 2021. Buyers in the bracket of £400k to £500k will now gain an average saving of £15,000 on their purchase.
Those purchasing second homes or buy-to-let properties also benefit from the stamp duty holiday. Property investors who purchase through limited companies will also be exempt up to £500,000. However, the pre-existing 3% surcharge on such purchases will still apply.
So property investors spending less than £500,000 will only need to pay 3% tax on top of the purchase, as opposed to the previous 5%. For the portion between £500,001 and £925,000, the charge will be 8%. Between £925,001 and £1.5m, the fee is 13%. The rate for the final portion above that is 15%.
So in summary
- Threshold increased to £500,000 from £125,000
- It is affective from 8th July 2020 until 31 March 2021
- Second Homes / Buy to Let subject to the surcharge only of 3% (Previously normal rates of stamp duty applied plus a 3% surcharge)
9. Temporary VAT Reduction
- This has been reduced to 5% for the Hospitality sector (Food, accommodation and attractions)
- This applies to the supply of food and non-alcoholic drinks from restaurants, pubs, bars and cafes (Not Alcohol unfortunately)
- This applies to all accommodation throughout the UK and admission to attractions
- This will be until 12th January 2021
- The reduction will commence Wednesday 15th July
10. Self Employed Income Support Scheme (SEISS)
Until now, self-employed workers who qualify have been in line for a grant of 80% of their average profits, up to £2,500 a month for three months.
If you haven’t claimed the first one already then you have until the 13th July to do so.
Rishi has already announced applications for a second taxable grant to the Self-Employed which is great news. The main points of this are:
- The second applications will be made in August
- They will cover the periods of June, July & August
- The second grant will be capped at £2.190 (70% instead of 80% of your average monthly trading profits)
- You will need to confirm your work has been affected by the virus
- They would not need to have taken the first grant to be eligible for the second, although the same eligibility criteria is in place as before (See Below) This means if you didn’t take the first grant because your business was unaffected and then subsequently your business was affected from June then you can claim the second grant.
- Self-Employed can continue to work
Further guidance on the scheme can be found here
Please click on the link and see if you our eligible. You will need your Unique Tax Reference number (UTR) and your National Insurance number
You will be able to set up an online government gateway account which is required to make your claim if you have not already done so.
Please let us know if you have been successful with your claim or if you are having any difficulty.
11. Sustainable Innovations Fund (SIF)
The government has expanded its COVID-19 support for start-ups and innovative companies with the launch of a new fund.
On 27 June the government announced the Sustainable Innovation Fund (SIF), which is aimed at helping businesses to keep ‘cutting edge’ projects and ideas alive during the pandemic.
The SIF will make almost £200 million available to UK companies that are developing new technologies in certain areas. These include making homes and offices more energy efficient, creating ground-breaking medical technologies, and reducing the carbon footprint of public transport.
The government is asking research and development-intensive businesses to apply for the funding.
12. Chancellor to grant “draconian” powers to reclaim millions in COVID-19 support payments
Whilst the government financial support has been exceptional, as is human nature there are always those who seek to take advantage of unfortunate situations and there have been numerous businesses falsely claiming COVID-19 grant and support payments.
Well, Rishi Sunak is having absolutely none of it and is set to add legislation to the Finance Bill next week that will grant HMRC “draconian” new powers to go after those who broke coronavirus payment rules and try to reclaim hundreds of millions of pounds in falsely claimed furlough payments.
Whilst “draconian” measures sound as if HMRC will set up stocks in the local town square and we can all hurl rotten fruit at the wrongdoers, it is simpler and much more effective than that. Instead, if HMRC suspect that rules have been broken (i.e. staff have been working during furlough and claiming via CJRS) then HMRC can impose a 100% penalty on payments (Loosely meaning that you will pay back double what you fraudulently claimed)
Alongside this, HMRC are also to be handed powers to target recipients of the SEISS. If HMRC suspects that the business did not require a loan, or that a sole trader ceased trading after receiving a grant under the SEISS, then it will be able to put pressure on those being investigated to provide proof otherwise.
The additions to the Finance Bill that will grant these powers are set to come into effect mid-July. Once this legislation has been passed, any individual or business that received money from the CJRS or SEISS will have 30 days to self-declare a mistaken application and pay back the furlough cash or loan without penalty.
Down the line, once HMRC has received your filed accounts for the past and current year, if they decide a mistake has been made that still hasn’t been declared, then quite simply they will throw the book at you. Again, the onus will be on the accused to provide proof that they did not break any rules. If found liable then they will have to pay back 100% via tax payments. If they still do not pay this then they are liable for criminal prosecution.
Yikes. So. what does this mean for you? Well, if you have been playing by the rules, then nothing! But just to be safe, if you have benefitted from either of the COVID-19 schemes then ensure you keep evidence that employees are correctly on furlough, have not been working whilst on furlough and that they would have been working still if the pandemic hadn’t happened, Also, keep detailed records of why you felt you were entitled to access payments under whichever scheme you claimed from.
But again, you have nothing to worry about if you have clean hands (no pun intended).
YOU HAVE BEEN WARNED! – SO IF YOU DON’T HAVE THE FEE PROTECTION IN PLACE MAYBE IS NOW A GOOD TIME TO DO SO!
Well that’s all for now again folks, no doubt by now you are as exhausted as we are from all the information
Todays Newsletter was a joint by me Matt & Carla, so I can’t take all the credit this time!
Of course, please feel free to get in touch if you have any queries on the above.