Covid-19

COVID-19 Business Support Measures Update

2 min read

The Government have recently issued further guidance on two of the support packages available to businesses affected by COVID-19.

Coronavirus Job Retention Scheme (“CJRS”)

The updated guidance on the CJRS sets out the procedures following the changes that come into force on 1 July 2020.  The major change on 1 July will be that employers will be able to bring back employees on a part time basis.  The guidance covers in detail how the furlough grant should be calculated in this situation. 

The CJRS will come to an end on 31 October with the level of support being reduced as from 1 August.

  • June and July – The level of support is be unchanged
  • August – the Government will pay 80% of wages up to a cap of £2,500 and employers will pay ER NICs and pension contributions for the hours the employee does not work.
  • 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 and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
  • 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 and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.

Self-Employment Income Support Scheme (“SEISS”)

The deadline for claiming the first grant under the SEISS is 13 July.  All claims must be made on or before this date.  To find out if you are eligible to make a claim follow this link. 

Details of the second and final grant for self employed individuals have been released on the .GOV website.  Eligible individuals can claim a taxable grant worth 70% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profit, 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 when applying for the second and final grant. An individual does not need to have claimed the first grant in order to be eligible for the second and final grant.

Applications to make a claim for the second grant will open in August 2020.

If you have any questions, our team of expert Accountants would be happy to assist.

Disclaimer: Content posted is for informational & knowledge sharing purposes only, and is not intended to be a substitute for professional advice related to tax, finance or accounting. Each comment posted by third party readers/subscribers of our website on topics of tax and accounting is their personal opinion and due professional care should be taken by you before you act after reading the contents of that post. No warranty whatsoever is made that any of the posts are accurate and is not intended to provide, and should not be relied on for tax or accounting advice.

Covid-19: The tax implications of working from home

2 min read

Employees who work from home due to measures to control the coronavirus pandemic are covered by home-working expenses rules, HMRC has confirmed. Many of us are now working from home as offices are closed during the COVID-19 pandemic. This can mean additional expenditure for both employers and employees.

What tax reliefs are available?

Employer Reimbursed costs

Employers can make payments to employees to cover the reasonable costs of working from home.

Payments of fixed amounts of £6 per week or £26 per month can be paid tax free.

In order to qualify the employee must work at home regularly as part of a homeworking arrangement.

HMRC have confirmed that during the COVID-19 pandemic employees working from home because their office is closed or if they are following advice to self-isolate will meet these requirements.

Other working from home considerations

Alternatively the employer can reimburse the actual increased costs of working from home but this can be onerous to calculate and to evidence.

If an employee does not have internet access and needs this to work from home the employer can reimburse the costs of the internet connection tax free.

An employer can also purchase office equipment and furniture for an employee. Provided there is no significant private use there will be no taxable benefit in kind.

Prior to the COVID-19 pandemic an employee would be taxed on monies received if they had purchased office equipment and then been reimbursed by their employer. However, a temporary tax exemption has now been made for such reimbursements.

Relief for Employee Costs

If the employer does not pay the fixed amounts for use of home costs  it is possible for employees to make a claim for tax relief using the same scale rates of £6 per week or £26 per month. Again the actual additional expenditure can be claimed with the suitable evidence.

The relevant expenditure is additional heating and light costs and metered water

In addition an employee can also claim the cost of any extra phone costs due to business calls.

Claims for relief by an employee for the cost of office equipment that is not reimbursed by an employer should be approached with caution. To qualify costs have to relate to equipment used in the performance of an employee’s duty. Items such as desk and chair would arguably not qualify as they put you in a positon to perform your duties.

Additionally, HMRC will only accept a claim for computer equipment in limited circumstances as they would normally expect the employer to supply such equipment or at least make it available if it was necessary for the role.

If you are unsure on the tax treatment of working from home, or have any other employment tax queries, our team of expert Accountants would be happy to assist.

Stay up to date with the latest news. Read more on tax exemptions for home office expenses here.

Disclaimer: Content posted is for informational & knowledge sharing purposes only, and is not intended to be a substitute for professional advice related to tax, finance or accounting. Each comment posted by third party readers/subscribers of our website on topics of tax and accounting is their personal opinion and due professional care should be taken by you before you act after reading the contents of that post. No warranty whatsoever is made that any of the posts are accurate and is not intended to provide, and should not be relied on for tax or accounting advice.

Supporting businesses impacted by COVID-19

3 min read

In an interconnected global economy, the new coronavirus (also known as COVID-19) is affecting UK businesses and their operations. It has resulted in restrictions on travel and public gatherings, as well as supply chain disruptions and market uncertainty. We share some practical steps you can take to help manage the impact of COVID-19 on your business.

This page is updated regularly to give the latest news and resources for business owners. We’ve pooled together all our experts’ advice and sources of support together in one place. This should make it easier for you to find useful information and to know what your next steps are at this challenging time.

Keep up to date with the latest developments and advice        

You can read the latest guidance and advice to businesses on the GOV.UK website. The CBI have also published detailed guidance on their website.

Have a plan

In case all or some of your workforce have to self isolate put together a plan as to how you will manage this process now.  Here are a few practical things to consider:

  1. How will you communicate to your customers what is happening
  2. Can you divert your phone system
  3. How will the workforce communicate with each other if working from home
  4. Do you have up to date contact details for all your workforce
  5. If staff would need to connect to a computer network remotely check they can do this now
  6. Is it possible to split departments and segregate from one another to reduce the risk that everyone in a single department is affected  

Keep your staff informed

Firstly, keep everyone updated as to what you are doing to reduce the risk of exposure in the workplace.  Ensure everyone knows what they should do in the event that they do experience symptoms.

To avoid uncertainty you should also communicate to your staff the company sickness policy and how this would apply in different circumstances.

Financial support for businesses

The Government announced in the Budget a number of measures they are introducing to support businesses that are affected by COVID-19.

These include:

  • a statutory sick pay relief package for SMEs
  • a Business Rate Relief for small businesses and pubs
  • small business grant funding of £3,000 for all business in receipt of Small Business Rates Relief (SBRR) and Rural Rates Relief
  • the Coronavirus Business Interruption Loan Scheme to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance
  • the HMRC Time To Pay Scheme

Full details can be found on the GOV.UK website

Struggling to pay your tax because of COVID-19

If you are having difficulty or believe you will have difficulty paying your taxes on time HM Revenue & Customs have set up a new Coronavirus helpline.

Where possible you should call HMRC before the tax liability falls due to discuss a payment plan.  If you do not contact HMRC and don’t settle your liabilities on time you may incur a penalty.  HMRC Coronavirus Helpline – Telephone: 0800 015 9559

Sick pay for Self-Employed

For the self employed who find themselves out of work or have to self isolate, it is now simple to make a claim for Universal Credit or Contributory Employment and Support Allowance. https://www.gov.uk/employment-support-allowance

Coronavirus Business Interruption Loan Scheme

For the Business Interruption Loan schemes contact your bank as they will be the lenders that administer the loans. You can find out more information on the British Business Bank website. https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

Government launches coronavirus business support finder tool

The Government have launched a new tool to help businesses quickly and easily identify what support is available to them during the COVID-19 pandemic.

You can find the tool at: https://www.gov.uk/business-coronavirus-support-finder

The Future Fund

HM Treasury have published details of a new scheme called the Future Fund.  This new scheme, which is set to go live in May, is aimed at start-up high growth businesses which rely on equity investment and are unable to access the Coronavirus Business Interruption Loan Scheme.  The Government will issue convertible loans of between £125,000 and £5,000,000, which need to be matched by private investment.

The scheme, when launched, will be run in partnership with the British Business Bank.

Full terms of the loans and eligibility can be found at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/880119/Convertible_Loan_Key_Terms_-__Final_Version_.pdf

Self-Employment Income Support Scheme (SEISS) Going Live

HMRC have announced that the scheme will be open on 13 May with the first claims being paid into bank accounts on 25 May or within six working days of making a claim if later.

HMRC have already started to contact individuals that they believe may be entitled to claim.    

It is possible to check your eligibility by using HMRC’s online checker.  You will need your Unique Tax Reference (UTR) Number and National Insurance Number.  Once you have checked your eligibility you will be given a date as to when you should make your claim.

Those who are eligible will be able to claim a taxable grant worth 80% of their average trading profits up to a maximum of £7,500 (equivalent to three months’ profits), paid in a single instalment.

Full details of the scheme can be found here.