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Furloughed Workers – HMRC Portal
It seems that the portal for reclaiming employee wages and salaries will not be up and running until the end of April. Businesses can top up salaries but only need to pay 80% of gross salaries up to a maximum of £2,500 per month. That means businesses will need to find these payments until they can claim and receive the grant monies being made available through the scheme.
What isn’t clear yet is what happens about Employer’s secondary class 1 NI Contributions but hopefully we’ll get clarity on that soon along with zero hours and commission based remuneration.
Furloughed Workers for Employers
Details are yet to be published as to how the portal will work and what it will mean for zero hours contracts or those who do not get a regular wage or salary due to commissions. Below is the current Government employers information.
Support for businesses through the Coronavirus Job Retention Scheme
Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.
Eligibility
All UK businesses are eligible.
How to access the scheme
You will need to:
- designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
- submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)
HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.
If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.
Furloughed workers
If your employer cannot cover staff costs due to COVID-19, they may be able to access support to continue paying part of your wage, to avoid redundancies.
If your employer intends to access the Coronavirus Job Retention Scheme, they will discuss with you becoming classified as a furloughed worker. This would mean that you are kept on your employer’s payroll, rather than being laid off.
To qualify for this scheme, you should not undertake work for them while you are furloughed. This will allow your employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month.
You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to.
If your salary is reduced as a result of these changes, you may be eligible for support through the welfare system, including Universal Credit.
We intend for the Coronavirus Job Retention Scheme to run for at least 3 months from 1 March 2020, but will extend if necessary.
https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-guidance-for-employees
Covid-19 Business Support so far
From the Government website https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
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.
This includes a package of measures to support businesses including:
- a Coronavirus Job Retention Scheme
- deferring VAT and Income Tax payments
- a Statutory Sick Pay relief package for SMEs
- a 12-month business rates holiday for all retail, hospitality and leisure businesses in England
- small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
- grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
- the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
- a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
- the HMRC Time To Pay Scheme
Covid-19 Update #2
Some welcome news regarding employment protection yesterday. Up to 80% of employee salary (capped at £2,500 per month) for employees that otherwise would have been laid off. The details are to follow but a much needed reassurance.
VAT payments and July’s self assessment payments have been deferred. A word of caution for some of these measures is that they will have to be paid at some point so personal and business debts could start racking up and this needs to be factored in to any cash flow planning.
Employment support update
Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.
Eligibility
All UK businesses are eligible.
How to access the scheme
You will need to:
- designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
- submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)
HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.
If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.
Support for your business
Where to start!
Currently there is little detail but things are happening so quickly. SSP will be available from day one and will be paid by the government for 2 weeks.
The £3,000 cash grant for small businesses has been raised to £10,000 but this will not be available until next month at the earliest.
More announcements expected today regarding employment support.
2020 Budget Report
This Report, which was written immediately after the Chancellor of the Exchequer delivered his Budget Speech, is intended to provide an overview of the latest announcements and recent measures most likely to affect you or your business.
See the full report at https://planpractice.co.uk/budget-2020/
Employers Allowance Changes
More Great communication from HMRC resulting in panic.
From 6th April this year there are changes to the eligibility for claiming the Employers Allowance. This is worth up to £3,000 and is design to encourage employment. Will you be affected by the changes? Chances are, if you qualify now, probably not.
If you employ people over the primary NI threshold (currently £166pw), or have two directors both being paid above the primary threshold, you currently qualify for the allowance. This is not changing.
If your secondary NI liability for the previous tax year exceeds £100,000 or you receive other State Aid that take you over a defined de minis state aid limit based on your industry sector, then you will lose your EA or have it restricted. For these businesses, the EA does not make a lot of difference or provide the same incentives for which it was intended.
No need to panic!
https://www.gov.uk/guidance/changes-to-employment-allowance
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