Claiming back Statutory Sick Pay paid to employees due to coronavirus (COVID-19)

The Coronavirus Statutory Sick Pay Rebate Scheme will repay employers the Statutory Sick Pay paid to current or former employees.

HMRC have updated the guidance to confirm that employers can only claim for employees who were off work on or before 30 September 2021.

The online service you could use to claim back Statutory Sick Pay (SSP) is now available.

See: Check if you can claim back Statutory Sick Pay paid to employees due to coronavirus (COVID-19) - GOV.UK (https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19)

Summary of UK Business Rules Relaxed During the Coronavirus Pandemic

We thought it would be useful to publish a summary of the rules that have been temporarily relaxed by the Government to make it easier for businesses to continue working through the disruption caused by coronavirus (COVID-19).

The government has temporarily relaxed the rules in the following areas:

• Annual leave: Workers will be allowed to carry over leave into the next 2 years.

• Business rates revaluation postponed: Revaluation of business rates will no longer take place in 2021 to help reduce uncertainty for firms affected by the impacts of coronavirus.

• Childcare funding: Councils will be able to move around government funding for free childcare entitlements to make sure sufficient childcare places are available for vulnerable children and those of critical workers.

• Companies House enforcement: Enforcement process has been relaxed, including temporarily pausing the strike off process to prevent companies being dissolved.

• Competition law: Rules have been relaxed for certain agreements that would normally be considered anti-competitive.

• Corporate insolvency and governance: New measures have been introduced to relieve the burden on businesses, including:

o temporary easements on filing requirements and Annual General Meetings (AGMs)

o a new moratorium to give companies breathing space from their creditors while they seek a rescue

o temporarily removing the threat of personal liability for wrongful trading from directors

• Delivery drivers’ hours: Rules have been relaxed for 30 days for drivers supplying supermarkets.

• Destroying spoilt beer: Temporary measure to help brewers and publicans.

• Driver CPC requirement: Temporary changes to allow bus and lorry drivers who cannot complete compulsory Driver CPC training to continue to drive.

• Energy supply: Guidance from Ofgem on how to manage this.

• Eviction protection for commercial tenants: A ban on eviction for businesses who cannot pay their rent.

• Filing accounts and annual statements: 3-month extension from Companies House.

• Gender pay gap reporting: Deadline suspended for one year.

• Hotel accommodation for key workers: Letter to hotel chief executives allowing them to offer accommodation to support key workers and vulnerable people.

• Intellectual property services alterations: Patent applications.

• MOTs suspended: vehicle owners have been given a 6-month exemption.

• Navigation charges deferred: Charges for air navigation services in European airspace deferred for up to 14 months.

• Off-payroll working rules (IR35): The new rules have been delayed by 12 months.

• Personal protective equipment (PPE) and hand sanitiser: New suppliers will be able to bring products to market more quickly and easily.

• Pubs and restaurants to operate as takeaways: Pubs and restaurants will not need planning permission.

• Right-to-work checks: Temporary adjustments will make it easier for employers to carry out.

• Statutory Residence Test: Temporary changes for those coming to the country to work on COVID-19 related activity.

• Tax cuts to reduce PPE cost: PPE purchased by care homes, businesses, charities and individuals to protect against coronavirus will be free from VAT for a 3-month period.

• Taxable expenses: Find out what is taxable while employees are working from home.

You can read more here: https://www.gov.uk/government/organisations/department-for-business-energy-and-industrial-strategy

Defer your Self Assessment payment on account due to coronavirus

To help ease the financial impact of the coronavirus (COVID-19), the Government announced that self-employed taxpayers may be able to defer some tax payments without paying a penalty. 

At present it is possible to:

- delay VAT payments due before 30 June 2020 until 31 March 2021;

- delay self-assessment payments on account due in July 2020 until 31 January 2021.

Taxpayers have the option to defer their second payment on account for the 2019/20 tax year if they are registered in the UK for self-assessment and finding it difficult to make a second payment by 31 July 2020, due to the impact of coronavirus.

HMRC will not charge interest or penalties on any amount of the deferred payment on account, provided it is paid on or before 31 January 2021.

Taxpayers do not need to tell HMRC that they are deferring the payment on account, and choosing to defer will not prevent them from being entitled to other coronavirus support that HMRC provide, such as grants under the Self-Employment Income Support Scheme (SEISS).

The second payment on account must be made on or before 31 January 2021 if people choose to defer and there is concern around the tax and accountancy professions that deferment may have a knock-on 'snowball effect'. Whilst deferral will give an element of 'breathing space' in the short term, it may store up bigger problems in the future if liabilities continue to remain unpaid. HMRC confirm that the usual interest, penalties and debt collection procedures will apply to missed payments.

Taxpayers should note that other payments which may need to be paid by 31 January 2021 include any balancing payment due for the 2019/20 tax year, and first payment on account due for the 2020/21 tax year. 

For further information on payments, taxpayers can sign in to their HMRC online account, or if you're a Hillmans client we can check this for you. 

You can read more here: https://www.gov.uk/guidance/defer-your-self-assessment-payment-on-account-due-to-coronavirus-covid-19

Weekly Update 29th May 2020

Below I have summarised all the main tax related updates we’ve seen this week. 

• Chancellor extends self-employment income support scheme
• Major changes to the furlough scheme
• North Somerset Council Discretionary Grants Fund Now Open (closes the 8th June)
• ow to Claim back Statutory Sick Pay due to coronavirus (COVID-19)
• Temporary Coronavirus Tax Exemption for Homeworker Expenses
• How to register as a self-employed subcontractor in the construction industry

As always if you need any support or advice please don’t hesitate to contact me.

I hope you have a great weekend! 

Major changes to the furlough scheme

In a further annoucement this evening, the Chancellor has confirmed a number of changes to the furlough scheme. 

In June and July the furlough scheme will continue as before. However from August, employers will be asked to cover National Insurance and employer pension contributions.

From September, employers will pay 10% of wages for furloughed staff, and then in October 20%.

The Government is also introducing a more flexible furlough scheme in July, with the ability to bring back employees on a part-time basis, whilst remaining on the furlough scheme. 

To summarise the furlough changes: 

- June & July - no employer contribution.

- Aug - employers pay NI and pension contributions.

- Sept - government pays 70% and employers pay 10% of wages.

- Oct - government pays 60% and employers pay 20% of wages.

The furlough scheme will then close at the end of October 2020.

Chancellor extends self-employed income support scheme

The Chancellor this evening annouced some good news for the self-employed. It has been confirmed that the self-employment income scheme (SEISS) will be extended, with applications opening in August for the second and final grant payment. 

The second grant will work the same as for the first grant, however the max grant will be capped at £6,570 or 70% of average profits (previously 80%).

Unfortunately the support grant still excludes company directors who earn dividends from their own limited company.

The SEISS scheme will then end.

Temporary Coronavirus Tax Exemption for Homeworker Expenses

The government has introduced a temporary tax exemption and National Insurance disregard to ensure that home office equipment purchased by employees as a result of the coronavirus outbreak, will not attract tax and NICs liabilities where reimbursed by the employer. This temporary change applies for 2019/20 from 16 March 2020, and for the 2020/21 tax year.

To be eligible for the exemption the expenditure must meet the following two conditions:

- The equipment is obtained for the sole purpose of enabling the employee to work from home as a result of the coronavirus outbreak; and

- The provision of the equipment would have been exempt from income tax if it had been provided directly to the employee by or on behalf of the employer.

Mobile phones and internet connections

If an employer provides a mobile phone and SIM card without a restriction on private use, limited to one per employee, this is non-taxable.

If an employee already pays for broadband, then no additional expenses can be claimed. However, if a broadband internet connection is needed to work from home and one was not already available, the broadband fee can be reimbursed by the employer and is non-taxable. In this case, the broadband is provided for business and any private use must be limited.

Laptops, tablets, computers, and office supplies

If items are purchased and mainly used for business purposes with incidental private use, these will be non-taxable.

Where the employer does not reimburse the employee for purchased items, the employee can claim tax relief for the expenditure on their tax return (or form P87) as long as the amount claimed is incurred 'wholly, exclusively and necessarily in the performance of their duties of employment'. Employees will need to keep records of their purchase and claim for the exact amount.

Additional household costs of working from home

Payment or reimbursement to employees of up to £6 a week from 6 April 2020 is non-taxable for additional household expenses incurred when an employee is required to work from home.

If an employer wishes to pay more than the guideline rate of £6 per week tax-free, then it is recommended that the employer should agree a scale rate in advance with HMRC. Failing that, records will need to be kept of the actual additional costs incurred by each employee.

Temporary accommodation

If an employee needs to self-isolate but cannot do so in their own home, the employer may reimburse hotel expenses and subsistence costs but such expenses will be taxable.

How to Claim back Statutory Sick Pay due to coronavirus (COVID-19)

The Coronavirus Statutory Sick Pay Rebate Scheme has launched online today (26th May).  

The Coronavirus Statutory Sick Pay Rebate Scheme will repay employers the Statutory Sick Pay paid to current or former employees.

Who can use the scheme

You can use the scheme as an employer if:

• you’re claiming for an employee who’s eligible for sick pay due to coronavirus

• you have a PAYE payroll scheme that was created and started on or before 28 February 2020

• you had fewer than 250 employees on 28 February 2020 across all your PAYE payroll schemes

Employees do not have to give you a doctor’s fit note for you to make a claim. But you can ask them to give you either:

• an isolation note from NHS 111 - if they are self-isolating and cannot work because of coronavirus (COVID-19)

• the NHS or GP letter telling them to stay at home for at least 12 weeks because they’re at high risk of severe illness from coronavirus

The scheme covers all types of employment contracts, including:

• full-time employees

• part-time employees

• employees on agency contracts

• employees on flexible or zero-hour contracts

• fixed term contracts (until the date their contract ends)

Using an agent to do PAYE online

If you use Hillmans as your PAYE agent, we will be able to claim on your behalf. 

Mortgage deferral extended for a further three months

The Government has confirmed that homeowners struggling to pay their mortgage due to Coronavirus will be able to extend their mortgage payment holiday for a further three months, or start making reduced payments, in proposals published today.

The availability of a three month mortgage holiday was first announced in March which will be coming to an end in June.

However if you are still struggling and need help, a full extension of the mortgage holiday for a further three months will be available.

You can read more here: https://www.gov.uk/government/news/help-with-mortgages-to-continue-for-homeowners-affected-by-coronavirus

Coronavirus Statutory Sick Pay Rebate Scheme will launch online on the 26th May 2020

HMRC have confirmed that the Coronavirus Statutory Sick Pay Rebate Scheme will launch online on 26th May 2020.

The scheme will enable small and medium-sized employers with fewer than 250 employees to claim coronavirus-related Statutory Sick Pay (SSP). 

If you are a Hillmans payroll client we will be to make the claim on your behalf. 

Employers are eligible to use the scheme if:

• they are claiming for an employee who’s eligible for sick pay due to coronavirus

• they had a PAYE payroll scheme in operation before 28 February 2020

• they had fewer than 250 employees across all PAYE schemes on 28 February 2020

• they are eligible to receive State Aid under the EU Commission Temporary Framework.

The repayment will cover up to two weeks of the applicable rate of SSP, and is payable if a current or former employee was unable to work on or after 13th March 2020 and entitled to SSP, because they either:

• have coronavirus

• are self-isolating and unable to work from home

• are shielding because they have been advised that they’re at high risk of severe illness from coronavirus.

To prepare to make a claim, employers should keep records of all the SSP payments they wish to claim for.

For more information about eligibility and the claim process go to: https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19 

Small firms that missed £10k grant could benefit from £617m new grants

There could be some good news for small businesses that missed out on the £10,000 government grant because they were not on their local council’s rates list as they may now be able get the money.

The Government has announced £617m in new grants to support businesses in shared spaces, regular market traders and small charity properties. This includes businesses who pay Business Rates indirectly via their landlord rather than being on the rates list themselves. 

It will be at local authorities’ discretion who gets the money, and can include Bed & Breakfasts that pay council tax rather than business rates.

To qualify, a business must have under 50 employees and be able to demonstrate that they have seen a significant drop of income due to coronavirus restriction measures. Grants of £10,000 and £25,000 will be available, and local authorities can choose to make payments of any other amount under £10,000 depending on local economic needs if they wish.

The local Council will need to set up a new payment system to administer the grants, so they are not available immediately. 

We will keep you up to date with any developments. 

New Bounce Back Loans launch today

The Governments new Bounce Back Loan Scheme (BBLS) has launched this morning. The BBLS offers businesses a 100% government-backed lending facility if you meet the Bounce Back Loan Scheme eligibility criteria (which I’ll detail below).

Coronavirus and R&D Tax Credits

Research and development (R&D) tax incentives are an effective way for companies to get a cash rebate from HMRC. This incentive and cash rebate could be more important than ever if you are struggling with cash flow due to the coronavirus.

Many companies are taking advantage of the lock-down period and time available to file an R&D claim with HMRC. HMRC are processing claims more rapidly at present to better support businesses cash flows, quoting up to 5 weeks rather than the 8-10 weeks previously.

Whilst rebates vary, over the past 6 months the average claim size for our clients has been £18,000! 

It is a common misconception that to be engaged in Research and Development activities that a company must be running labs packed full of people in white coats. This is not the case! You simply must have attempted to overcome scientific or technological uncertainties by creating new or enhancing existing products, services, software or processes in order to have a qualifying R&D activity.

You would be surprised at how many companies fulfil these criteria without realising they are eligible for a significant tax benefit.

If you would like to discuss making an R&D claim further, please drop me a line.

Best wishes,

Steve

Steven Hillman ACA
Chartered Accountant
Tel: 01934 444100

New 100% government backed loan scheme for small business

The Chancellor Rishi Sunak told the House of Commons today that small businesses are to get access to 100% taxpayer-backed loans after they raised concerns about slow access to existing coronavirus rescue schemes.

The scheme will start next week, offering firms loans up to £50,000 within days of applying.

The key points to note are:

• businesses will be able to borrow between £2,000 and £50,000 and access the cash within days

• loans will be interest free for the first 12 months, and businesses can apply online through a short and simple form

Small businesses will benefit from a new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders.

The government will provide lenders with a 100% guarantee for the loan and pay any fees and interest for the first 12 months. No repayments will be due during the first 12 months.

For more information visit: https://www.gov.uk/government/news/small-businesses-boosted-by-bounce-back-loans

Coronavirus grants for young entrepreneurs

The Prince’s Trust has launched a new grant to assist young business owners during the Coronavirus crisis. The grant is available for business owners aged 18 to 30, who set up their business in the last four years and do not have any other source of income during the Coronavirus crisis.

Grants can be used to maintain core business operations during the crisis, as well as meet any existing financial commitments, such as paying for essential equipment or settling invoices from suppliers. Additionally, grants will also support young people to diversify their business to respond to opportunities created by the crises. In conjunction with grants, the initiative will offer one-to-one support and guidance to any applicants who need it.

You can apply for the grant here: https://www.princes-trust.org.uk/about-the-trust/coronavirus-response/enterprise-relief-fund

Coronavirus Future Fund for tech start-ups

The government has announced a new Future Fund scheme, issuing convertible loans to help start-ups struggling due to the coronavirus outbreak. The loans will range from £125k to £5million.

A convertible loan gives the government the option to convert the loan to shares.

The loans will be available from May until September. 

It is important to note the future fund will only be available if a business is unable to access the CBILS.

You’re eligible if your business:

-is based in the UK

-can attract the equivalent match funding from third-party private investors and institutions

-has previously raised at least £250,000 in equity investment from third-party investors in the last 5 years

Visit https://www.gov.uk/guidance/future-fund for more information. 

Coronavirus and VAT

Coronavirus and VAT 

If your sales turnover has fallen due to the Coronavirus, it may be beneficial to review whether it would be worth your business deregistering for VAT. You can deregister if you think your turnover will be below the VAT deregistration threshold of £83,000 for the next 12 months.

We can also review whether it would be worth moving to a cash accounting or flat rate scheme. 

Please drop us a line if you would like to discuss this further. 

Claim working from home allowance during the coronavirus

HMRC have announced that it will increase the maximum flat rate tax deduction available where employees incur additional household costs where they work at home under homeworking arrangements, from £4 per week to £6 per week. This will take effect from April 2020.

If your employer requires you to work at home, you can make a claim, this is particularly relevant in the current environment due to the coronavirus. 

Broadly, no tax liability arises where employers make payments to employees for reasonable additional household expenses, which the employee incurs in carrying out duties of the employment at home under 'homeworking arrangements'.

'Homeworking arrangements' are arrangements between the employee and the employer under which the employee regularly performs some or all of the duties of the employment at home. There is no requirement for any part of the employee's home to be used exclusively for the purposes of the employment - in fact, if any part of the home is used exclusively for work, problems could arise on the future sale of the house as part of the capital gains tax exemption on private residences may be lost.

HMRC have stated that they will accept that homeworking arrangements exist where:

- there are arrangements between the employer and the employee; and
- the employee works at home regularly under those arrangements.

Coronavirus and High Income Child Benefit Charge

The coronavirus (COVID-19) pandemic is causing many people to see a reduction in their income. This can mean there are knock-on effects to your tax position.

If your income falls below £60,000, your liability to the High Income Child Benefit Charge (HICBC) may change or be eliminated completely. Where this is the case, if you do not currently claim child benefit, you may wish to consider claiming it. If you have opted out of receiving payment, you may wish to restart payments.

To restart your Child Benefit, either:

1. Fill in an online form. You need a Government Gateway user ID and password to fill in the online form. If you do not have a user ID, you can create one when you fill in the form.

2. Contact the Child Benefit Office on 0300 200 3100. Have your National Insurance number or Child Benefit number with you when you call.

Please drop us a line if you need any support with this.

Best wishes,

Steve

Steven Hillman ACA
Chartered Accountant
https://www.hillmans.co.uk/covid-19-updates

Coronavirus (COVID-19) - An update for all of our clients

In light of the ever-changing situation around Covid-19 Coronavirus, I wanted to share with you what support and help there is available. Apologies for the general nature of this message but I wanted to get something out ASAP. I am available for you on an individual basis so please don’t hesitate to get in touch.