Find out what we know about how the Government plans to help your business through the Coronavirus Outbreak.
Coronavirus Job Retention Scheme (CJRS)
CJRS means all employers will be able to access support to pay part of employee’s salaries to avoid making them redundant during this crisis. This pay will be backdated to 1st March and will last for three months, though might me extended by the government.
The employees affected will need to be ‘furloughed’ and you must notify them of this. During this time they mustn’t do work for you.
Once HMRC launch the system you will need to input information to HMRC about the employees that are furloughed and their pay. This will be done through their online portal.
HMRC will reimburse 80% of furloughed workers wage costs, up to £2,500 per month per employee, though you can top-up their salaries above this amount if you wish to.
All UK employers qualify for this scheme regardless of their size.
The government has to right to retrospectively audit all aspects of the scheme and will seek to get back any fraudulent or erroneous claims, so you should retain all documentation and calculations.
Workers can’t claim redundancy pay if they are part of this scheme.
Are zero-hour contracts covered by the CJRS?
From what the Government has said it might apply to some people on these contracts under PAYE, but we don’t know how much they would be entitled to as they have no regular monthly salary.
How is pay calculated?
There is currently no information on how the 80% of pay will be calculated, and if pension payments and salary sacrifice arrangements will be involved, but there has been speculation that February’s pay will be used as a basis for the amount.
Are directors eligible for pay from their own company?
The Government hasn’t released any information on whether the CJRS applies to directors, but, as a furloughed worker can’t do any work for the company, that might be unlikely for a shareholder.
When will it be paid?
HMRC is aiming to start sending the funds out before the end of April, but it could be later than that. In the meantime, if you require more immediate cash-flow help, then you could apply for the Government’s loan schemes.
Deferring VAT
All VAT due between 20 March 2020 and the 30 June 2020 can be deferred, and this is automatically available so there is no need to apply for it. Also, HMRC won’t charge interest on on any late payment but you must pay the liability by 1 April 2021. However, you STILL NEED TO SUBMIT YOUR VAT RETURN ON TIME, as late submission penalties will still apply.
Deferring Income Tax Payments if you are self-employed
The second payment on account for 2019/20, due by 31 July 2020, can be deferred until the 31 January 2021, and this is automatically available so no interest will be charged on this payment.
HMRC’s Time to Pay Scheme
If you can’t pay your tax liability you can use the HMRC Time to Pay Scheme. This scheme already exists and may be useful if you are struggling to pay your tax, however, if you are eligible for the previously mentioned points then you would already get the automatic deferral.