On Friday 20th March, the Chancellor announced for the first time in history the government will pay peoples wages via a Coronavirus Job Retention Scheme.
What is it and what will it cover?
HMRC will reimburse 80% of workers wage costs, up to a cap of £2,500 per month.
Employers can choose to top up pay either for the unfunded 20% of pay or the amount above £2,500 for higher earners, but this will not be a formal requirement to obtain access to the scheme.
Who is eligible?
All employers are eligible for this scheme.
How do I apply?
If you are an employer you will need to:
* Designate affected employees as ‘furloughed workers,’ and notify your employees of this change
* Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)
* HMRC will reimburse the employer therefore the employer will make the wage/ salary payment to the furloughed worker and then be reimbursed by HMRC.
When will it be available?
* HMRC are working urgently to set up a system for reimbursement a existing systems are not set up to facilitate payments to employers.
* The scheme will be open before the end of April and will be backdated to 1 March 2020.
* If you need cash flow in the meantime you may be eligible for a Coronavirus Business Interruption Loan
What is a furloughed worker?
We understand that a furloughed workers are “workforce who remain on payroll but are temporarily not working during the coronavirus out
Other Support for Businesses
* Deferring VAT and Income Tax payments
* A Statutory Sick Pay relief package for SMEs
* Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
* Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
* A Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
* a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
* Bank of England has cut interest rates to 0.1%, the lowest ever interest rate
* HMRC Time To Pay Scheme
* Rates holiday for businesses for 3 months
* IR35 deferment
* All annual returns due to be filed by any Company don’t have to be filed until 30th June 2020
* Self-employed people can claim Universal Credit at a rate equivalent to SSP which is £94.25 per week
Other Support for Individuals
* Mortgage Holidays for 3 months are available.
* Landlords will not be able to start proceedings to evict tenants for at least a 3 month period.
* Rates bills won’t be issued until June.
* Universal credits and/or ESA are available if you are:
o self-isolating and self-employed:
o Not eligible to receive sick pay
o Prevented from working because of a risk to public health
* An increase of £1,000 per year of the standard Universal Credit allowance and tax credits basic allowance
* Universal Credits minimum income floor is to be temporarily abolished to support those who have reduced income as a result of coronavirus.
We have a team who will constantly be monitoring government changes and updating our website to keep all of our clients up to date with both current and accurate information.