COVID19 Support

YFT has collated information to support businesses and individuals through the current Corona outbreak. We know this is an extremely stressful time for business owners so want to share what we know and offer some practical advice on how to access the support available. We are monitoring conditions closely and will update this page as we know more.

Cashflow Forecasting and FREE cashflow forecast template

We have produced a simple cashflow forecast template for you to look at your companies cash position over the next few months.

We would really recommend that you have this in place and update it as conditions change Please note that the model is suitable for small non vat registered businesses if you require more detailed planning and need our help please get in touch.

Download:  Cashflow Forecast Template (XLSX)

Fraud

Unfortunately, we are seeing more activity from fraudsters trying to take advantage of the current situation.

 

HMRC Fraud

If you get any emails, texts or phone calls  purporting to be from HMRC that are asking you to take action, for example enter your bank details for a refund, please do not respond. If you are in any doubt refer the email to us or contact HMRC directly phishing@hmrc.gov.uk

HMRC will never send notifications by email about tax rebates or refunds. Do not:

  • visit the website
  • open any attachments
  • disclose any personal or payment information

Fraudsters may spoof a genuine email address or change the ‘display name’ to make it appear genuine. If you are unsure delete it.

Xero

Be careful of fake invoices, this is where you receive a fraudulent invoice that looks genuine  – here is the link with details of how these frauds work

https://www.xero.com/blog/2017/03/email-fraud-protect-business/

Job Retention scheme: Furlough Guidance

 

Furloughed members of staff must not work for the employer during the period of furlough.

Furlough is from 1 March 2020, so is to be backdated. It will last for at least 4 months and will be extended if necessary. Note that while the scheme is backdated to the beginning of March as it is intended to support all those employed then, a firm will only be eligible to claim the grant once they have agreed the furlough with their staff and staff have stopped working for the employer. This will of course be subject to employment law in the usual way.

The scheme is available for employees on the payroll at 19 March 2020.

All UK businesses are eligible, ‘any employer in the country, small or large, charitable or non-profit’ to use the Chancellor’s words.

The scheme pays a grant (not a loan) to the employer.

The grant will be paid to the employer through a new online system which is being built for this purpose. There is no detail about the application process at the moment.

The employer will pay the employee through payroll, and report payments to HMRC using the Real Time Information (RTI) system as usual, as required by the employment contract. This contract may be re-negotiated, but that is a matter for employment law.

The scheme will be administered by HMRC:
• Relevant employees must be designated as furloughed employees.
• Employers will submit claims to HMRC through a new online portal.
• As the system will take time to build, businesses should look to the Coronavirus Business Interruption Loan Scheme to support cash flow in the meantime. The narrative used in the information released so far says ‘if your employer cannot cover staff costs due to COVID-19 they may be able to access support…’. This is a conditional phrase which may relate to existing funds available to the employer. We do not yet know how these might be determined, nor whether there is a bar of some description.

The maximum grant will be calculated per employee and is the lower of:
• 80% of ‘an employee’s regular wage’ and.
• £2,500 per month.
Plus the associated employers’ national insurance contributions (NIC) on this amount and the minimum automatic enrolment employer pension contributions on that wage.
Fees, commission and bonuses should not be included.

More detailed advice

Apprentices

Apprentices can be furloughed in the same way as other employees and they can continue to train whilst furloughed.

However, you must pay your Apprentices at least the Apprenticeship Minimum Wage, National Living Wage or National Minimum Wage (AMW/NLW/NMW) as appropriate for all the time they spend training. This means you must cover any shortfall between the amount you can claim for their wages through this scheme and their appropriate minimum wage.

Guidance is available for changes in apprenticeship learning arrangements because of COVID-19.

Public sector organisations

The government expects that the scheme will not be used by many public sector organisations, as most public sector employees are continuing to provide essential public services or contribute to the response to the coronavirus outbreak.

Where employers receive public funding for staff costs, and that funding is continuing, we expect employers to use that money to continue to pay staff in the usual fashion – and correspondingly not furlough them. This also applies to non-public sector employers who receive public funding for staff costs.

Organisations who are receiving public funding specifically to provide services necessary to respond to COVID-19 are not expected to furlough staff.

In a small number of cases, for example where organisations are not primarily funded by the government and whose staff cannot be redeployed to assist with the coronavirus response, the scheme may be appropriate for some staff.

Individuals

Individuals can furlough employees such as nannies provided they pay them through PAYE and they were on their payroll on, or before, 28 February 2020.

Administrators

Where a company is being taken under the management of an administrator, the administrator will be able to access the Job Retention Scheme. However, we would expect an administrator would only access the scheme if there is a reasonable likelihood of rehiring the workers. For instance, this could be as a result of an administration and pursuit of a sale of the business.

Employees you can claim for

You can only claim for furloughed employees that were on your PAYE payroll on or before 28 February 2020.

Employees hired after 28 February 2020 cannot be furloughed and claimed for in accordance with this scheme.

Employees can be on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts. Foreign nationals are eligible to be furloughed.

To be eligible for the grant, when on furlough, an employee cannot undertake work for, or on behalf, of the organisation. This includes providing services or generating revenue. Employers are free to consider allocating any critical business tasks to staff that are not furloughed. While on furlough, the employee’s wage will be subject to usual income tax and other deductions.

If you made employees redundant or they stopped working for you after 28 February

If you made employees redundant, or they stopped working for you on or after 28 February 2020, you can re-employ them, put them on furlough and claim for their wages through the scheme.

If your employees are working reduced hours

If an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for this scheme.

If your employee is on unpaid leave

You can only claim for employees that started unpaid leave after 28 February 2020.

If your employee is self-isolating or on sick leave

If you’re employee is on sick leave or self-isolating, they’ll be able to get Statutory Sick Pay.

You cannot claim for employees while they’re getting Statutory Sick Pay, but they can be furloughed and claimed for once they are no longer receiving Statutory Sick Pay.

Shielding Employees

You can claim for furloughed employees who are shielding in line with public health guidance (or need to stay home with someone who is shielding) if they are unable to work from home and you would otherwise have to make them redundant.

Employees with caring responsibilities

Employees who are unable to work because they have caring responsibilities resulting from coronavirus (COVID-19) can be furloughed. For example, employees that need to look after children can be furloughed.

If your employee has more than one job

If your employee has more than one employer they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually.

Employees can be furloughed in one job and receive a furloughed payment but continue working for another employer and receive their normal wages.

If your employee is on a fixed term contract

Employees on fixed term contracts can be furloughed. Their contracts can be renewed or extended during the furlough period without breaking the terms of the scheme. Where a fixed term employee’s contract ends because it is not extended or renewed you will no longer be able claim grant for them.

Eligible individuals who are not employees

As well as employees, the grant can be claimed for any of the following groups, if they are paid via PAYE:

  • office holders (including company directors)
  • salaried members of Limited Liability Partnerships (LLPs)
  • agency workers (including those employed by umbrella companies)
  • limb (b) workers

The guidance below sets out specific considerations for those individuals who are paid via PAYE, but who are not necessarily employees in employment law. Unless explicitly set out below, all other guidance is applicable to these cases, and should be followed.

Office Holders

Office holders can be furloughed and receive support through this scheme. The furlough, and any ongoing payment during furlough, will need to be agreed between the office holder and the party who operates PAYE on the income they receive for holding their office. Where the office holder is a company director or member of a Limited Liability Partnership (LLP), the furlough arrangements should be adopted formally as a decision of the company or LLP.

Company Directors

As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme. Company directors owe duties to their company which are set out in the Companies Act 2006. Where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed. Where one or more individual directors’ furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned.

Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, for instance, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.

This also applies to salaried individuals who are directors of their own personal service company (PSC).

Salaried Members of Limited Liability Partnerships (LLPs)

Members of LLPs who are designated as employees for tax purposes (‘salaried members’) under the Income Tax (Trading and Other Income) Act (ITTOIA) 2005 are eligible to be furloughed and receive support through this scheme.

The rights and duties of a member of an LLP are set out in an LLP agreement and in the absence of an agreement, default provisions in the LLP Act 2000, based upon company and partnership law. Such an agreement may include separate agreement between the LLP and an individual member setting out the terms applicable to that member’s relationship with the LLP.

To furlough a member, the terms of the LLP agreement (or any such agreement between the LLP and the member) may need to be varied by a formal decision of the LLP, for example to reflect the fact that the member will perform no work in the LLP for the period of furlough, and the effect of this on their remuneration from the LLP. For an LLP member who is treated as being employed by the LLP (in accordance with s863A of ITTOIA 2005), the reference salary for this scheme is the LLP member’s profit allocation, excluding any amounts which are determined by the LLP member’s performance, or the overall performance of the LLP.

Agency Workers (including those employed by umbrella companies)

Where agency workers are paid through PAYE, they are eligible to be furloughed and receive support through this scheme, including where they are employed by umbrella companies.

Furlough should be agreed between the agency, as the deemed employer, and the worker, though it would be advised to discuss the need to furlough with any end clients involved. As with employees, agency workers should perform no work for, through or on behalf of the agency that has furloughed them while they are furloughed, including for the agency’s clients.

Where an agency supplies clients with workers who are employed by an umbrella company that operates the PAYE, it will be for the umbrella company and the worker to agree whether to furlough the worker or not.

If your employee does volunteer work

A furloughed employee can take part in volunteer work, if it does not provide services to or generate revenue for, or on behalf of your organisation. Your organisation can agree to find furloughed employees new work or volunteering opportunities whilst on furlough if this is in line with public health guidance.

If your employee undertakes training

Furloughed employees can engage in training, as long as in undertaking the training the employee does not provide services to, or generate revenue for, or on behalf of their organisation. Furloughed employees should be encouraged to undertake training.

Where training is undertaken by furloughed employees, at the request of their employer, they are entitled to be paid at least their appropriate national minimum wage for this time. In most cases, the furlough payment of 80% of an employee’s regular wage, up to the value of £2,500, will provide sufficient monies to cover these training hours. However, where the time spent training attracts a minimum wage entitlement in excess of the furlough payment, employers will need to pay the additional wages (see National Minimum Wage Section for more details).

If your employee is on maternity leave, adoption leave, paternity leave or shared parental leave

The normal rules for maternity and other forms of parental leave and pay apply.

You can claim through the scheme for enhanced (earnings related) contractual pay for employees who qualify for either:

  • maternity pay
  • adoption pay
  • paternity pay
  • shared parental pay

Agreeing to furlough employees

Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.

To be eligible for the grant employers must confirm in writing to their employee confirming that they have been furloughed. A record of this communication must be kept for five years.

You do not need to place all your employees on furlough. However, those employees who you do place on furlough cannot undertake work for you.

How much you can claim

You’ll need to claim for:

  • 80% of your employees’ wages (even for employee’s on National Minimum Wage) – up to a maximum of £2,500. Do not claim for the worker’s previous salary.
  • minimum automatic enrolment employer pension contributions on the subsidised wage

You can choose to top up your employee’s salary, but you do not have to. Employees must not work or provide any services for the business while furloughed, even if they receive a top-up salary.

Grants will be prorated if your employee is only furloughed for part of a pay period.

Claims should be started from the date that the employee finishes work and starts furlough, not when the decision is made, or when they written to confirming their furloughed status.

The way you work out your employees’ wages is different depending on what type of contract they’re on, and when they started work.

Full or part time employees on a salary

Claim for the 80% of the employee’s salary, as of 28 February 2020, before tax.

Employees whose pay varies

If the employee has been employed for 12 months or more, you can claim the highest of either the:

  • same month’s earning from the previous year
  • average monthly earnings for the 2019-2020 tax year

If the employee has been employed for less than 12 months, claim for 80% of their average monthly earnings since they started work.

If the employee only started in February 2020, work out a pro-rata for their earnings so far, and claim for 80%.

Employer National Insurance and Pension Contributions

You’ll still need to pay employer National Insurance and pension contributions on behalf of your furloughed employees, and you can claim for these too.

You cannot claim for:

  • additional National Insurance or pension contributions you make because you chose to top up your employee’s salary
  • any pension contributions you make that are above the mandatory employer contribution

Past Overtime, Fees, Commission, Bonuses and non-cash payments

You can claim for any regular payments you are obliged to pay your employees. This includes wages, past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips) and commission payments and non-cash payments should be excluded.

Benefits in Kind and Salary Sacrifice Schemes

The reference salary should not include the cost of non-monetary benefits provided to employees, including taxable Benefits in Kind. Similarly, benefits provided through salary sacrifice schemes (including pension contributions) that reduce an employee’s taxable pay should also not be included in the reference salary. Where the employer provides benefits to furloughed employees, this should be in addition to the wages that must be paid under the terms of the Job Retention Scheme.

Normally, an employee cannot switch freely out of a salary sacrifice scheme unless there is a life event. HMRC agrees that COVID-19 counts as a life event that could warrant changes to salary sacrifice arrangements, if the relevant employment contract is updated accordingly.

Apprenticeship Levy and Student Loans

Both the Apprenticeship Levy and Student Loans should continue to be paid as usual. Grants from the Job Retention Scheme do not cover these.

National Minimum Wage

Individuals are only entitled to the National Living Wage (NLW)/National Minimum Wage (NMW)/ Apprentices Minimum Wage (AMW) for the hours they are working or treated as working under minimum wage rules.

This means that furloughed workers who are not working can be paid the lower of 80% of their salary or £2,500 even if, based on their usual working hours, this would be below their appropriate minimum wage. However, time spent training is treated as working time for the purposes of the minimum wage calculations and must be paid at the appropriate minimum wage, taking into account the increase in minimum wage rates from 1 April 2020. As such, employers will need to ensure that the furlough payment provides sufficient monies to cover these training hours. Where the furlough payment is less than the appropriate minimum wage entitlement for the training hours, the employer will need to pay the additional wages to ensure at least the appropriate minimum wage is paid for 100% of the training time.

Where a furloughed worker is paid close to minimum wage levels and asked to complete training courses for a substantial majority of their usual working time employers are recommended to seek independent advice or contact Acas.

Here is the link to the .GOV site:

https://www.businesssupport.gov.uk/coronavirus-job-retention-scheme/

Coronavirus Business Interruption Loan Scheme

The banks are starting to release details of what they are offering and the terms around these loans. Already there are very different terms being offered so we recommend that you shop around to find good deals. We cannot offer direct advice on which loans to take but if you need help contact us and we can you put you in touch with a brokerage firm that looks at different lenders. If you are looking for high value loans (over £1m) we can also put you in touch with a firm who specialises in finding these.

The temporary Coronavirus Business Interruption Loan Scheme supports small and medium-sized businesses with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to six years.

The Government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.

The scheme will be delivered through commercial lenders, backed by the Government-owned British Business Bank.

There are 40 accredited lenders able to offer the scheme, including all the major banks.

Am I eligible?

You are eligible for the scheme if:

your business is UK based, with turnover of no more than £45 million per year

your business meets the other British Business Bank eligibility criteria

How do I access it?

You should apply via your lender’s website or through one of the 40 accredited finance providers offering the scheme (and not the British Business Bank).

Please note that branches may currently be shut down to enable social distancing.

The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website.

Time to Pay – this is a scheme to help you if you cannot afford to pay your current taxes

What is it?

All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

Am I eligible?

You will be eligible if:

  1. Your business pays tax to the UK Government
  2. Your business has outstanding tax liabilities

How do I access it?

If you’ve missed, or are worried about missing, your next tax payment due to coronavirus, please contact HMRC. You can also call the HMRC helpline for advice on 0800 0159 559.

For more information on late payments, check with HMRC

If you’re worried about a future payment, please call HMRC nearer the time.

VAT Deferral – this means deferring or postponing your VAT – you will still need to pay it by March 2021

What is it?

We will support businesses by deferring Valued Added Tax (VAT) payments for 3 months.

Am I eligible?

All VAT-registered UK businesses are eligible.

How do I access it?

This is an automatic offer with no applications required. UK Registered businesses will not need to make VAT payments normally due with VAT returns during this period. Taxpayers will be given until the end of the 2020-21 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.

Customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. Please do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return.

When can I access it?

The deferral will apply from 20 March 2020 until 30 June 2020.

Deferral of Self-Assessment payment - you will still need to pay it by January 2021

What is it?

The Self- Assessment payment on account, that is ordinarily due to be paid to HMRC by 31 July 2020 may now be deferred until January 2021.

Am I eligible?

If you are due to pay a self- assessment payment on account on 31 July 2020 then you are eligible for the deferment. The deferment is intended to assist self-assessment taxpayers, including those who are self-employed, who are suffering hardship as a result of the coronavirus.

The deferment is optional and any persons still able to pay their second self-assessment payment on account on 31 July 2020 should still do so.

How do I access it?

This is an automatic offer with no applications required. No penalties or interest for late payment will be charged if you defer payment of your July 2020 payment on account until January 2021.

HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of coronavirus and have outstanding tax liabilities.

When can I access it?

On 31 July 2020 when your self-assessment payment on account, ordinarily due to be paid on that date, may be deferred until 31 January 2021.

Small Business Grant Funding – this is for a small business with a business premises

What is it?

The Government is providing additional funding for Local Authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

Am I eligible?

You will be eligible if

  1. Your business is based in England* AND
  2. You are a small business and already receive SBRR and/or RRR AND
  3. You are a business that occupies property

How do I access it?

You do not need to do anything. Your Local Authority will write to you if you are eligible for this grant.

When can I access it?

Local Authorities will write to all eligible businesses with information on how to claim this grant. Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant Local Authority. To find your Local Authority, use this search tool.

*Some aspects of business support are devolved. For business support outside of England go to ScotlandWales and Northern Ireland.

Statutory Sick Pay Rebate

What is it?

The Government will bring forward legislation to allow small and medium-sized businesses to reclaim Statutory Sick Pay (SSP) paid for staff sickness absence due to coronavirus. This refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of coronavirus.

Am I eligible?

You will be eligible if:

  1. Your business is UK based AND
  2. Your business is a small or medium sized and employs fewer than 250 employees as of 28 February 2020.

How do I access it?

A rebate scheme is being developed, further details will be provided in due course.

When can I access it?

The Government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible. Existing systems are not designed to facilitate employer refunds for SSP.

If you are self-employed and want to know if you are eligible for Universal Credit, please visit the gov.uk Universal Credit page

Business Rates Holiday for Retail, Hospitality and Leisure and Grant

What is it?

Businesses in the retail, hospitality and leisure sectors in England will not have to pay business rates for the 2020-21 tax year. Businesses that received the retail discount in the 2019-20 tax year will be rebilled by their local authority as soon as possible.

Am I eligible?

You will be eligible if:

  1. Your business is based in England*, AND
  2. Your business is in the retail, hospitality and/or leisure sector. Properties that will benefit from the relief will be those that are wholly or mainly being used:
  3. as shops, restaurants, cafes, drinking establishments, cinemas and live music venues,
    b. for assembly and leisure; or
    c. as hotels, guest and boarding premises and self-catering accommodation.

How do I access it?

  1. There is no action for you. Local authorities will apply the business rates holiday to your bills. For more information please check the guidance on gov.uk.
  2. You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator.
  3. You can find your local authority on gov.uk.

When can I access it?

This will apply to your business rates bills for the 2020/2021 tax year. However, local authorities may have to reissue your bill. They will do this as soon as possible.

*Some aspects of business support are devolved. For business support outside of England go to ScotlandWales and Northern Ireland.

Grants

If your business is in the retail, hospitality or leisure sector, you will receive a cash grant of up to £25,000 per property.

Businesses in these sectors with a property that has a rateable value of up to £15,000 will receive a grant of £10,000.

Businesses in these sectors with a property that has a rateable value of over £15,000 and less than £51,000 will receive a grant of £25,000.

Am I eligible?

You will be eligible if:

  1. Your business is based in England*
  2. Your business is in the retail, hospitality and/or leisure sector
  3. Properties that will benefit from the relief will be occupied properties that are wholly or mainly being used
Self Employed Grants

This was the main announcement last night. Note: you can still work in your self-employed job if you claim this grant.

This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.

Who can apply?

You can apply if you’re a self-employed individual or a member of a partnership and you:

  • have submitted your Income Tax Self-Assessment tax return for the tax year 2018-19
  • traded in the tax year 2019-20
  • are trading when you apply, or would be except for COVID-19
  • intend to continue to trade in the tax year 2020-21
  • have lost trading/partnership trading profits due to COVID-19

Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment. This is determined by at least one of the following conditions being true:

having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income

having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period

If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.

If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020.

HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.

How much you’ll get

You’ll get a taxable grant which will be 80% of the average profits from the tax years (where applicable):

2016 to 2017

2017 to 2018

2018 to 2019

To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.

It will be up to a maximum of £2,500 per month for 3 months.

We’ll pay the grant directly into your bank account, in one instalment.

How to apply

You cannot apply for this scheme yet.

HMRC will contact you if you are eligible for the scheme and invite you to apply online.

Individuals do not need to contact HMRC now and doing so will only delay the urgent work being undertaken to introduce the scheme.

You will access this scheme only through GOV.UK. If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.

After you’ve applied

Once HMRC has received your claim and you are eligible for the grant, we will contact you to tell you how much you will get and the payment details.

If you claim tax credits you’ll need to include the grant in your claim as income.

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