COVID-19 NEWS BULLETIN 23rd March 2019
India’s market takes the biggest opening hit.
Compared with last week’s picture......... Source: BBC
CORONA JOB RETENTION SCHEME
The government announced on Friday they are to introduce the Coronavirus Job Retention Scheme (CJRS) which should potentially provide employers with much more confidence in terms of your ability to manage the costs of payroll during the Covid-19 pandemic.
At the moment however, information is sparse. The government is clearly reacting as the situation develops and will need to add detail to the CJRS but what I know at present is as follows:
It allows employers to access financial support to continue paying the salaries of employees who would otherwise have been laid off/made redundant as a result of Covid-19
Employers will need to designate affected employees as “furloughed employees” but will need their consent to do this
Once they are designated, employers need to submit information (details of the furloughed employees and their earnings) to HMRC via an online portal which has not yet been set up
HMRC will reimburse the employer up to 80% of earnings subject to a cap of £2500 (national median salary). At the moment it isn’t clear whether this is net or gross income
This scheme will be backdated to March 1 to cover a three-month period
The government expects the first job-retention grants to be paid before the end of April
From an employment law perspective, you need to consider the following:
Where contracts do not have a lay off clause, you will need employees’ permission to furlough them. Realistically however, it is inevitable they will agree given that the alternative is potential redundancy
The guidance for employees on CJRS states it is up to the employer whether they have to top up the extra 20%
If an employer chooses to withhold the 20%, they will need employees’ consent to avoid any later deduction from wages claims. This means that when an employer seeks an employee’s permission to give them furloughed status they should confirm this in writing as a variation to their contract and make it clear in the agreement that they agree to the salary cut on a temporary basis where the remaining 20% will not be paid back (my legal team are currently compiling an appropriate letter template in this regard)
It is for the employer to decide who to furlough; an employee cannot insist
At the moment this is an accurate summary of what I know at present based on what the government has released. Obviously, I will be monitoring the situation and will update you as more information is added. Hopefully though, it gives you a lot more confidence in your ability to manage the employment costs during Covid-19.
Please also see the link below direct to the gov.uk website that provides ongoing information on all of the financial support available to businesses and which is updated: source: HR Heroes
The Chancellor has set out a package of temporary, timely and targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19.
This includes a package of measures to support businesses including:
a Coronavirus Job Retention Scheme
deferring VAT and Income Tax payments
a Statutory Sick Pay relief package for small and medium sized businesses (SMEs)
a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
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
the 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
the HMRC Time To Pay Scheme
Support for businesses through the Coronavirus Job Retention Scheme
Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.
Eligibility
All UK businesses are eligible.
How to access the scheme
You will need to:
designate affected employees as ‘furloughed workers,’ and notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
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 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.
If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.
Support for businesses through deferring VAT and Income Tax payments
We will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. If you’re self- employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
VAT
For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.
Eligibility
All UK businesses are eligible.
How to access the scheme
This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 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.
Income Tax
For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.
Eligibility
If you are self-employed you are eligible.
This is an automatic offer with no applications required.
No penalties or interest for late payment will be charged in the deferral period.
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 Covid-19 and have outstanding tax liabilities.
Support for businesses who are paying sick pay to employees
We will bring forward legislation to allow small-and medium-sized businesses and employers to reclaim
Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19.
The eligibility criteria for the scheme will be as follows:
this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
employers with fewer than 250 employees will be eligible - the size of an employer will be determined by the number of people they employed as of 28 February 2020
employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website
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