Coronavirus Hub

Tax payments due 31 July 2020 – do you really need to defer? - Additional text in bold below

In response to the Coronavirus outbreak, HMRC announced that taxpayers required to make a second payment on account towards their 2019/20 income tax liability by 31 July 2020 can defer their payment until 31 January 2021. The deferral is automatic, so there is no need to inform HMRC and no interest or penalties will be charged during the deferral period.

However, it must be appreciated that this is a measure to assist those suffering financial hardship due to the Coronavirus pandemic. HMRC expect taxpayers who have not suffered financial hardship and have sufficient funds available to make the payment on time and this remains the case despite the fact that the statements they are currently issuing show a due date of 31 January 2021 for the second payment on account.

Limited Companies and LLP’s - How to apply for breathing space to consider a rescue plan for your company, under measures to support companies and other types of business in financial difficulty.

If your business has or is really struggling, you can get “formal” breathing space to consider a rescue plan for your company.

A moratorium gives struggling businesses formal breathing space in which to explore rescue and restructuring options, free from creditor action.

Except in certain circumstances, no insolvency proceedings can be instigated against the company during the moratorium period. It also prevents legal action being taken against a company without permission from the court - with the exception of employment tribunal proceedings, or proceedings between an employer and a worker, which do not require permission of the court to commence or continue.

Directors remain in control of the company and will still need to meet their filing obligations with Companies House. Late filing penalties will still be applied where accounts are filed late.

How to get a moratorium

The directors must file for or apply to court for a moratorium. It will give the company 20 business days to consider rescue options.

The moratorium will be managed by a monitor, who is a licensed insolvency practitioner.

Extending a moratorium

The moratorium can be extended for a further 20 business days without creditor consent, or for a longer period with creditor consent, by filing relevant statements with the court. It can also be extended further on application to the court.

Any extension must be made before the current expiry of the moratorium.

What to send to Companies House

To make sure the company’s record is accurate and up to date, any notices must be delivered to Companies House as quickly as possible.

The monitor must deliver notice of the commencement of a moratorium to Companies House.

They also need to receive a notice if:

• the moratorium is extended
• the moratorium is terminated early
• the monitor is replaced, or an additional monitor is appointed
• the court makes an order giving permission for the disposal of property

The moratorium will expire at the end of the initial 20 business day period or any extended period.

The monitor is not required to deliver a notice stating that the moratorium has ended if it has expired by time.

The monitor must deliver a notice if it has ended for another reason, such as:

• it has been terminated early by the monitor
• the company has entered an insolvency procedure

Who it applies to:

A moratorium can be applied for by companies and LLPs registered in England and Wales, Scotland and Northern Ireland.

Please click here for further information.

If you are in difficulty, please talk to us and we will do our best to help you review all available options.

CJRS Update

Please note that HMRCs online calculator can only be used for furlough claims ending on or before 30 June. After this date, you will need to work this out. This means that for any employees who you are flexibly furloughing, you’ll need to do a series of calculations to work out what the furlough pay will be for the usual hours that your employee is not working during your claim period. Further guidance on how to calculate what you can claim can be found in the links below.

Example of how to calculate the amount you should claim for an employee who is flexibly furloughed

Examples of how to calculate your employees' wages, National Insurance contributions and pension contributions

HMRC have provided a webinar on how the scheme is changing please click here to book your place.

Businesses Need to Reinstate VAT Direct Debits

The deferral of VAT payments due to Coronavirus comes to an end on 30 June and businesses need to take action to reinstate their direct debit mandates.

The VAT payment deferral means that all UK VAT-registered businesses have the option to defer VAT payments due between 20 March and 30 June 2020 until 31 March 2021.

However, businesses need to take steps to reinstate their direct debit mandates so that they are in place in time for payments due in July 2020 onwards. Any outstanding returns should be filed, and three working days should be allowed to elapse before reinstating the direct debit mandate.

HMRC will issue guidance on the end of the VAT deferral period very soon but, to be effective, direct debit mandates usually need to be set up three working days before a VAT return is filed.

We cannot set up direct debit mandates on behalf of our clients; the business needs to set up the mandate through their business tax account.

HMRC has confirmed that it will not collect the outstanding balance of deferred VAT when the direct debit mandate is reinstated. HMRC has made the necessary systems change to avoid this happening for businesses in MTD for VAT.

Please click here for further information from HMRC.

Coronavirus Job Retention Scheme Updates

For periods starting on or after the 1 July, the maximum number of employees you can claim for in any period cannot be higher than the maximum number you have claimed for in a previous period. For example, if your highest single claim for periods up to 30 June was for 100 people, you can’t claim for more than this number in later periods.

Parents Returning to Work after Extended Leave Eligible for Furlough

People on paternity and maternity leave who return to work in the coming months will be eligible for the government’s furlough scheme, HM Treasury announced 9 June.

In essence:

• Parents on statutory maternity and paternity leave who return to work in the coming months will be eligible for furlough scheme even after 10 June cut-off date
• Coronavirus Job Retention Scheme will close to new entrants at the end of June as new flexibilities are introduced to support economy
• This will only apply where they work for an employer who has previously furloughed employees
• This also applies to people on adoption leave, shared parental leave, and parental bereavement leave.

Making Changes to Your Claims If You Have Over-Claimed

If you’ve made an error in a CJRS claim that means you received too much money, you must pay this back to HMRC.

HMRC have updated the application system so you can tell them if you have over-claimed in a previous claim – when you apply you’ll be asked if you need to reduce the amount to take account of a previous error. Your new claim amount will be reduced to reflect this. You should then keep a record of this adjustment for six years.

If you have made an error in a CJRS claim and do not plan to submit further claims, HMRC are working on a process that will allow you to let them know about your error and pay back any amounts that you have over-claimed. We will update guidance and keep you informed when this is available.

Local Authority Discretionary Grant Fund Launched

The Discretionary Grant Fund supports small and micro businesses that are not eligible for other grant schemes opened on the 8 June.

Small and micro businesses with fixed property costs that are not eligible for the Small Business Grant Fund or the Retail, Hospitality and Leisure Grant Fund may be eligible for the Discretionary Grants Scheme.

What you get

You can get a grant of £25,000, £10,000 or any amount under £10,000.

Eligibility

You may be eligible if your business:

• is based in England
• has relatively high ongoing fixed property-related costs
• occupies property (or part of a property) with a rateable value or annual mortgage/rent payments below £51,000
• was trading on 11 March 2020

You will need to show that your business has suffered a significant fall in income due to Coronavirus.

The Government has asked local councils to prioritise businesses such as:

• small businesses in shared offices or other flexible workspaces, such as units in industrial parks or incubators
• regular market traders
• bed and breakfasts paying council tax instead of business rates
• charity properties getting charitable business rates relief, which are not eligible for small business rates relief or rural rate relief

Local councils have discretion about how to prioritise this funding. Please check with your council for details of their scheme.

You cannot apply if your business is in administration, insolvent or has received a striking-off notice.

If you are already claiming funding

You cannot apply if you are already claiming under another government grant scheme, such as:

• Small Business Grant Fund
• Retail, Hospitality and Leisure Grant
• Fisheries Response Fund
• Domestic Seafood Supply Scheme
• Zoos Support Fund
• Dairy Hardship Fund

Businesses that apply for the discretionary grants scheme can still apply for Coronavirus-related loans if they are eligible.

You are still eligible if you have applied for the Coronavirus Job Retention Scheme or the Self-Employed Income Support Scheme.

For the full report click here.

Job Retention Scheme - Flexible Furloughing and Important Dates

The Chancellor has announced major changes to the Coronavirus Job Retention Scheme (CJRS). HMRC have outlined the details below; see how you might be affected.

From 1 July, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim CJRS grant for their normal hours not worked. When claiming the CJRS grant for furloughed hours employers will need to report and claim for a minimum period of a week.

If your employees are unable to return to work, or you do not have work for them to do, they can remain on furlough and you can continue to claim the grant for their full hours under the existing rules.

Employer contributions

From August, the government grant will be tapered as follows:

• For June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and minimum auto-enrolment pension contributions for the hours the employee does not work – employers will have to pay employees for the hours they work (applicable from 1 July).
• In August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions.
• From 1 September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500
• For the final month of the scheme in October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500
• The cap on the furlough grant will be proportional to the hours not worked.

Important dates

It is important to note that the scheme will close to new entrants from 30 June. From this point onwards, you will only be able to furlough employees that you have furloughed for a full three-week period prior to 30 June.

This means that the final date that you can furlough an employee for the first time will be 10 June for the current three-week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.

The Chancellor has confirmed that the CJRS will close on 31 October.

Guidance and support

Further support on how to calculate claims with the extra flexibility will be available by 12 June and we will keep you informed about the details and your written requirements in due course. If you have any questions please contact us. See more details here.

Chancellor Extends Self-Employment Support Scheme

The government’s Self-Employment Income Support Scheme (SEISS) will be extended with those eligible able to claim a second and final grant capped at £6,570. This will give more security to individuals whose livelihoods are adversely affected by Coronavirus in the coming months. You do not need to have claimed the first grant to receive the second grant, for example, if your business has only recently been affected by Coronavirus.

• Individuals can continue to apply for the first SEISS grant until 13 July. Under the first grant, eligible individuals can claim a taxable grant worth 80% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £7,500 in total. Those eligible have the money paid into their bank account within six working days of completing a claim.
• Applications for the second grant will open in August. Individuals will be able to claim a second taxable grant worth 70% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total.
• The eligibility criteria are the same for both grants, and individuals will need to confirm that their business has been adversely affected by Coronavirus. An individual does not need to have claimed the first grant to receive the second grant: for example, they may only have been adversely affected by COVID-19 in this later phase.

Further guidance on the second grant will be published on Friday 12 June and we will keep you up to date with the details when we know them. See more details here.

No announcement or Grant was made at the daily press conference regarding Company Directors and those who became self-employed after April 2019.

Claim a grant through the Self-Employment Income Support Scheme (SEISS)

Please click here to access the SEISS portal for applications. This scheme is available if you’re self-employed or a member of a partnership and have been adversely affected by coronavirus (COVID-19). If you haven’t already, please check if you are eligible to claim a grant by clicking here.

Please note that for a small number of cases, the checker is giving an incorrect not-eligible result. In most cases this as a result of late filing of the 2018/19 Tax Return. HMRC is updating the system and those who may be in this situation should keep trying the checker.

The eligibility checker includes an option to request a review of not-eligible results. The review can be requested by the taxpayer or their agent. HMRC will start to consider review cases later in May, after the bulk of the claims have been made.

The level of grant will be automatically calculated by HMRC, individuals will not need to enter any figures or information about past income. Therefore a review should also be requested if you believe the grant calculated by HMRC to be incorrect, please note that reviews of this nature can only be requested by the individual making the claim, agents are currently unable to make these requests. Clients of Humphrey & Co should speak to their usual contact if they would like calculations checked for them.

Those who are digitally excluded and unable to claim online are expected to be able to make claims by phoning HMRCs SEISS helpline. HMRC recommend that, where possible, the webchat facility be used in preference to phoning, to help manage demand.

Chancellor Extends Furlough Scheme Until October

The government’s Coronavirus Job Retention Scheme will remain open until the end of October, the key points announced by Chancellor Rishi Sunak are:

• Coronavirus Job Retention Scheme will continue until end of October
• furloughed workers across UK will continue to receive 80% of their current salary, up to £2,500
• new flexibility will be introduced from August to get employees back to work and boost economy

The Government stated as we reopen the economy, we need to support people to get back to work. From the start of August, furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff.

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.

New statistics published today revealed the job retention scheme has protected 7.5 million workers and almost 1 million businesses.

The scheme will continue in its current form until the end of July and the changes to allow more flexibility will come in from the start of August.

More specific details and information around its implementation will be made available by the end of this month.

The government will explore ways through which furloughed workers who wish to do additional training or learn new skills are supported during this period. It will also continue to work closely with the Devolved Administrations to ensure the scheme supports people across the Union.

The Chancellor’s decision to extend the scheme, which will continue to apply across all regions and sectors in the UK economy, comes after the government outlined its plan for the next phase of its response to the Coronavirus outbreak.

Self-Employed Income Support Scheme (SEISS)

Further guidance has now been issued by the Government in respect of the Self-Employed Income Support Scheme (“SEISS”).

HMRC will begin contacting individuals who may be eligible to receive a grant under the SEISS from 4 May. You may, therefore, have already received correspondence from HMRC. Once you have received confirmation from HMRC that you may be eligible to receive a grant you will be entitled to make a claim when the online system opens on 13 May. We understand, however, that HMRC are trying to stagger claim applications so the date you can claim from may be later.

It is important to note that we, as your agent, are unable to make the claim on your behalf.

We will, of course, be happy to assist with any queries you may have when making the claim or in assessing your eligibility for a grant.

What you will need to make a claim

The current guidance suggests that you will require the following:

1. Your Unique Taxpayer Reference (UTR) (can be found on the front on your Tax Return)
2. Your National Insurance Number (can be found on the front of your Tax Return)
3. Your Government Gateway ID and Password
4. Bank account number and sort code for payment

As you will see from point 3, it is important that you have a Government Gateway account setup in order to make the claim application yourself. If you do not already have a Government Gateway account you will need to register for one as soon as possible. To do this, please:

• click on the following link - https://www.tax.service.gov.uk/bas-gateway/sign-in?continue_url=/account&origin=
• click “Continue to your account” at the bottom of the page
• click “Create sign in details” on the next page (underneath the green 'sign in' button)

Eligibility

Ahead of receiving correspondence from HMRC in connection with the SEISS they are also inviting you to check your eligibility for a grant as follows - https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference.

You will be required to enter your UTR and National Insurance Number and will then be prompted to ensure your contact details are correct by logging into your Government Gateway account. This is also a good opportunity to create a new account if you do not already have one. Should you be entitled to claim a grant we understand that it will be paid into your chosen bank account within 6 working days from the date of the claim.

If you have any queries in connection with your eligibility for a grant under the SEISS following the completion of the above online check please do not hesitate to contact us.

Government announces “bounce back” loans for small businesses

The Government has announced a new 100% Government backed loan scheme for small businesses.

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

Rishi Sunak said the new Bounce Back Loans scheme, which will provide loans of up to £50,000, would help bolster the existing package of support available to the smallest businesses affected by the coronavirus pandemic.

• 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.
• Loan terms will be up to 6 years.
• No repayments will be due during the first 12 months.

 The scheme will launch for applications on Monday 4 May. Businesses will be able to access these loans through a network of accredited lenders.

The government will work with lenders to ensure loans delivered through this scheme are advanced as quickly as possible and agree a low standardised level of interest for the remaining period of the loan:

ELIGIBILITY

You can apply for a loan if your business:

• is based in the UK
• has been negatively affected by coronavirus
• was not an ‘undertaking in difficulty’ on 31 December 2019

WHO CANNOT APPLY

The following businesses are not eligible to apply:

• banks, insurers and reinsurers (but not insurance brokers)
• public-sector bodies
• further-education establishments if they are grant-funded
• state-funded primary and secondary schools
• if you are already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS).

More information about the scheme will be published shortly. Click here for further details.

Find out if your business is eligible to receive government support

You may be eligible for loans, tax relief and cash grants. Use the business support finder to see what support is available for you and your business.

Coronavirus Business Support Finder