Personal Managers Association
This is the latest update from our accountants (Fisher Philips), summarising the Chancellor’s announcements on Friday:
As you are undoubtedly aware, the Chancellor, Rishi Sunak made an announcement late on Friday evening to include further additional measures to help businesses and we wanted to update you on those and how they might impact you. The main highlights of Friday’s announcements are as follows:-
A new Coronavirus Job Retention Scheme (CJRS) will be available to help pay employees’ wages. it will be available to all employers in the UK with the aim of keeping their current workforce on the payroll and therefore avoid major unemployment as a result of redundancies. The finer details of the scheme are not yet available however it is our understanding that:-
⢠Employers will be able to designate affected employees, who are temporarily not working during the coronavirus outbreak, as âfurloughed workers’.
⢠They must notify the employees of this change (this is subject to existing employment law and will be clarified).
⢠HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.
⢠Existing systems are not set up to facilitate payments to employers but HMRC are working urgently to set up a system for reimbursement which is expected to be in place by the end of April.
⢠To qualify for this scheme, the employee should not undertake work for the employer while they are furloughed.
⢠The scheme will be backdated to 1st March and will be initially open for 3 months, to be extended if necessary.
⢠It can apply to any employee who was on the payroll at 29 February 2020, even if they have subsequently been made redundant, as long as they are reinstated on the payroll.
The previously announced Coronavirus Business Interruption Loan Scheme designed to provide loans of up to £5 million with the government providing lenders with a guarantee of 80% on each loan will now be interest free for the first 12 months (not 6 months, as announced on Tuesday last). As before we are awaiting an update on this in the coming week.
VAT payments due by all VAT-registered businesses between now and the end of June will be deferred until 5th April 2021. VAT refunds and reclaims will be paid by HMRC as normal. We understand from this that VAT returns will still be requires to be submitted by the normal due dates.
Income tax payments of self-employed taxpayers due on 31 July 2020 under the Self-Assessment system will be deferred to January 2021. It is unclear whether this deferral excludes taxpayers who are due to pay tax on dividend and other investment income but again we are awaiting clarification during the week.
Full details of the announcements that the government have made in relation to Covid-19 and businesses can be found at : https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
Other measures to help the self-employed
While those in employment have been helped through the Chancellor’s announcements on Friday, the Government is under increased pressure to come forward with proposals to help the Self Employed who are unable to work due to coronavirus and we await further announcements in the coming week. Meanwhile the following provisions have been made under the welfare system, including Universal Credit.
o The standard rate in both Universal Credit (UC) and Tax Credits will be increased by £20 a week for one year from April 6th.
o The ‘minimum income floor’ for the self-employed claiming UC is temporarily suspended for everyone affected by the economic impacts of coronavirus. This means that every self-employed person can now access, in full, Universal Credit at a rate equivalent to SSP for employees.
o There will be additional support for renters, through increases in housing benefit and Universal Credit.
o From April, Local Housing Allowance rates will pay for at least 30% of market rents in each area.
We wish you good health and to stay safe during this time.
Fisher Phillips LLP