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COVID-19: An update for employers and employees

Date 1st April 2020 //
Author ABF
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The below matrix has been prepared to summarise the key measures set out by the UK Government to support people and businesses through this period of disruption and uncertainty, caused by the coronavirus pandemic.

 Individuals / EmployeesSelf-Employed Individuals*Businesses / Employers*

Coronavirus (COVID-19)

helpline

Webchat - Speak to an adviser - for problems paying taxes due to coronavirus (COVID-19), such as:

  • self-assessment

New phone number - 0800 024 1222.

Webchat - Speak to an adviser - for problems paying taxes due to coronavirus (COVID-19), such as:

  • self-assessment
  • VAT
  • employers’ PAYE

New phone number - 0800 024

1222.

Webchat - Speak to an adviser - for problems paying taxes due to coronavirus (COVID-19), such as:

  • self-assessment;
  • VAT
  • employers’ PAYE
  • corporation tax

New phone number - 0800 024

1222.

Employment income

and

self-employed income

The Coronavirus Job Retention Scheme will reimburse an employer with up to 80% of the pay of an employee who is not working but kept on the payroll (“furloughed”). Up to a maximum of £2,500 per month, plus the associated employer national insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage.

 

All employers remain liable for associated employer national insurance contributions and minimum automatic enrolment employer pension contributions on behalf of their furloughed employees.

 

Currently, less than complete clarity in relation to applicability to shareholding directors (“owner managers”).

Through the Self Employment Income Support Scheme (SEISS) the self-employed

(including partners), the majority of whose income is derived from self-employment, can secure a taxable direct grant of 80% of their average profit for the three tax years ending with the 2018/19 tax year or a shorter period (even just the 2018/19 tax year) if three years’ accounts are not available. This is subject to a maximum payment of £2,500 per month.

 

To qualify, the 2018/19

profit or average profit for up to three years ending with 2018/19 must not exceed £50,000. Grant to run for three months and payment (representing a cumulative three months’ rights) is expected in June. Claimants can continue to work and generate profit. HMRC to invite claims based on records they have.

The Coronavirus Job Retention Scheme will reimburse an employer with up to 80% of the pay of an employee who is not working but kept on the payroll (“furloughed”). Up to a maximum of £2,500 per month, plus the associated employer national insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage.

 

All employers remain liable for associated employer national insurance contributions and minimum automatic enrolment employer pension contributions on behalf of their furloughed employees.

 

Currently, less than complete clarity in relation to applicability to shareholding directors (“owner managers”).

 Individuals / EmployeesSelf-Employed Individuals*Businesses / Employers*
Sick PayCurrently £94.25 a week, rising to £95.85 for 2020/21, would be available to employees from day one instead of day four, including for those advised to self-isolate. However, there was no change in the minimum earnings threshold for SSP (£118 a week currently, rising to £120 a week in 2020/21).See 'Benefits' below.Businesses with fewer than 250 employees can be refunded for the cost of SSP for up to 14 days. The size of an employer will be determined by the number of people they employed as of 28 February 2020.
BenefitsFrom 6 April 2020, for 12 months, the standard allowance in Universal Credit (UC) and the basic element in Working Tax Credit (WTC) will be increased by £20 a week over and above the planned annual uprating. This will apply to all new and existing UC claimants and to existing WTC claimants. .

For those not entitled to SSP (e.g. the self-employed and gig economy workers), Contributory Employment and Support Allowance (ESA – a basic £73.10 a week for those 25 and over, rising to £74.35 in 2020/21) will be claimable from day one instead of day eight. To ensure that time off work due to sickness is reflected in benefits, the minimum income floor** in Universal Credit (UC) is temporarily removed if an individual gets coronavirus or has to stay at home because of it.

 

The minimum income floor won’t apply to anyone after 6 April 2020. This will last until the coronavirus outbreak is over. The stated aim is to ensure every self- employed person can now access, in full, UC at a rate equivalent to SSP for employees.

-
Grants-

£10,000 grant for all small businesses that qualify for Small Business Rates Relief (SBRR) or Rural Rates Relief. For SBRR, the rateable value of the property used by the business needs to be valued at £15,000 or less.

 

£25,000 grant for businesses in hospitality, leisure and retail whose rateable value is between

£15,000 - £51,000.

 

Local Authorities responsible for delivering the funding to eligible businesses. They will then be reimbursed by the Government.

£10,000 grant for all small businesses that qualify for Small Business Rates Relief (SBRR) or Rural Rates Relief. For SBRR, the rateable value of the property used by the business needs to be valued at £15,000 or less.

 

£25,000 grant for businesses in hospitality, leisure and retail whose rateable value is between

£15,000 - £51,000.

 

Local Authorities responsible for delivering the funding to eligible businesses. They will then be reimbursed by the Government.

 Individuals / EmployeesSelf-Employed Individuals*Businesses / Employers*
Business Loans-Business interruption loans are available to small and medium businesses from 23/03/2020 for up to £5 million, interest free for 12 months. This scheme will help any viable business with a turnover of up to £45m.

Business interruption loans are available to small and medium businesses from 23/03/2020 for up to £5 million, interest free for 12 months. This scheme will help any viable business with a turnover of up to £45m.

 

From 23/03/2020, the Bank of England’s Covid Corporate Financing Facility will provide a quick and cost-effective way to raise working capital for those large firms who need it.

MortgagesFor those in difficulty due to coronavirus, mortgage lenders will offer at least a three- month mortgage holiday.--
Renters

Emergency legislation to suspend new evictions from social or private rented accommodation while this national emergency is taking place.

 

No new possession proceedings through applications to the Court to start during the crisis.

 

Landlords will also be protected as the three-month mortgage payment holiday is extended to Buy to Let mortgages.

Commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction.

 

No business will be forced out of their premises if they miss a payment in the next three months.

Commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction.

 

No business will be forced out of their premises if they miss a payment in the next three months.

Business Rates-Business Rates holiday for businesses in hospitality, leisure and retail, plus estate agents, lettings agencies and bingo halls, for 12 months.Business Rates holiday for businesses in hospitality, leisure and retail, plus estate agents, lettings agencies and bingo halls, for 12 months.
Self- Assessment paymentsSelf-Assessment payments due 31 July 2020 deferred until 31 January 2021 - interest and penalty free.Self-Assessment payments due 31 July 2020 deferred until 31 January 2021 - interest and penalty free.Self-Assessment payments due 31 July 2020 deferred until 31 January 2021 - interest and penalty free.
VAT-For the period between 20 March 2020 and 30 June 2020, businesses will not need to make a VAT payment. No special application needed. Businesses will have until the end of the 2020/21 to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the Government as normal.For the period between 20 March 2020 and 30 June 2020, businesses will not need to make a VAT payment. No special application needed. Businesses will have until the end of the 2020/21 to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the Government as normal.
 Individuals / EmployeesSelf-Employed Individuals*Businesses / Employers*
Time to Pay scheme

Potential to agree payment of tax (e.g. income tax) in interest free instalments.

 

Those who cannot pay because of coronavirus should contact the

HMRC Coronavirus Helpline.

Potential to agree payment of tax (e.g. income tax) in interest free instalments.

 

Those who cannot pay because of coronavirus should contact the HMRC Coronavirus Helpline.

Potential to agree payment of tax (e.g. income tax /corporation tax) in interest free instalments.

 

Those who cannot pay because of coronavirus (COVID-19) should contact the

HMRC Coronavirus Helpline.

 

*Note that, because some elements of business support are devolved, the measures a business can access may differ if it is in Scotland, Wales or Northern Ireland:

**The minimum income floor is usually what someone of the same age would earn if they worked at the National Minimum Wage for the number of hours that the self-employed individual is expected to work or look for work. Normally, if the self-employed individual earns less than the minimum income floor, UC will not make up the difference.

*** Source of data - Technical Connection.

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