Operation Furlough

Operation Furlough

The HMRC portal to enable claims under the Coronavirus job retention scheme (furlough) is now open.

It is estimated that up to one million claims will be made but we understand that the site can accommodate a maximum of 450,000 users at any one time.

It also appears that the relevant connections to make the claim do not jump off the HMRC page and so we are giving below details of the relevant link:

https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme#how-to-claim

HMRC then published the following useful information:

How to claim

You’ll need the Government Gateway user ID and password you got when you registered for PAYE online.

Online services may be slow during busy times. Check if there are any problems with this service.

Claim now

After you’ve claimed

Once you’ve claimed, you’ll get a claim reference number. HMRC will then check that your claim is correct and pay the claim amount by Bacs into your bank account within 6 working days.

You must:

• keep a copy of the claim reference number for your records
• keep a copy of your calculations in case HMRC need more information about your claim
• tell your employees that you have made a claim and that they do not need to take any more action
• pay your employee their wages, if you have not already

Contacting HMRC

We are receiving very high numbers of calls. Contacting HMRC unnecessarily puts our essential public services at risk during these challenging times.

Do not contact HMRC unless it has been more than 10 working days since you made the claim and you have not received it in that time.

Press release: 25.8% of struggling small businesses in the South East will not survive the Coronavirus crisis

New research has revealed that 25.8% of struggling small businesses in the South East do not believe their business will survive the Coronavirus crisis. This compares to 30% across the UK.

Additionally, the research which has been conducted with 1,400 small businesses across the UK shows that 80% of businesses who feel they are at risk of failing are encountering problems in getting help from the banks.

The research, which has been undertaken by The Martlet Partnership together with other members of the UK200Group, asked small businesses across the UK to share information about how their business was faring before the lockdown and what has happened since. 

92% of the businesses surveyed felt their business was either trading ‘as expected’ or ‘better than expected’ before the crisis.  Since the lockdown 40% of these businesses have closed, either by the government or due to falling trade.

But the biggest underlying concern for many is the inability to access funds. 

Many participating in the survey recognise that the banks are doing their best, but they are stretched and are struggling due to a combination of lack of clarity on the new schemes from the government, increased demand and reduced resources due to the lockdown.

One respondent, an optician commented; “After nearly 2 weeks, the bank has not called me back and even though I’ve gone back to them, the response is they have my details, but they are exceptionally busy and will get back to me ASAP.”

The issue is compounded due to grants to cover furloughed staff costs not yet being available and thus the pressure on the cashflow for these small businesses is being stretched to breaking point.

Commenting managing director, David Macdonald of The Martlet Partnership of said; “Our concern is that these small businesses will simply run out of cash and that will result in many very good small businesses failing.  Yet this is avoidable as there are grants and schemes that have been made available, but they are not easily accessible or understood.  We are working with clients to support them in packaging their applications and then presenting them to the banks to ensure they have the best chance of a quick and positive response and thus can get the money they need to survive.”

We urge all small business owners to ask their accountants and business advisers to help them with their grant and loan applications.  Aside from being able to support you with your applications, they can also clearly explain the different options and schemes available and can advise businesses on the best course of action for them.

Update on portal for businesses

The online portal through which businesses can register their furloughed workers and apply to receive a grant to cover 80% of furloughed workers wages from the government, will be available from 20^th April.

Furthermore, the government has extended the eligibility to 19 March 2020 – the day before the scheme was announced. Previously the date had been set as 28th February.

This means that employers can claim for furloughed employees that were employed and on their PAYE payroll on or before 19 March 2020.

Clearly getting details of the date from when employers can start making a claim plus the date extension is welcome news.  However, it seems clear that the HMRC will be inundated with queries and claims as soon as their online portal opens on 20^th April.

Therefore, they have asked accountants such as us, to support them in this mammoth task of getting these grants to businesses as quickly as possible and with the minimum of fuss.

If you need to apply for a grant, we recommend that you start to collate the information that you will need now, ready to submit your application on 20^th April to receive your grant at the earliest possible date.

The key things that employers will need to make a claim are:

• Your PAYE reference number, UTR and Company number (if applicable)
• The number of employees being furloughed
• The claim period (start and end date)
• Amount claimed
• Your bank account number and sort code
• Your contact name and your phone number

N.B. In most cases, Payroll agents are unable to file a claim on behalf of an employer.  Unless you can confirm that your agent can definitely do so, you will need to be registered for PAYE Online through the Government Gateway.

If you would like assistance with making your claim, please get in touch at the earliest opportunity. Even if we cannot make the claim on your behalf, we will help you gather the required information and submit it in the correct format to help you get the funds as quickly as possible.

UPDATED CORONAVIRUS BUSINESS SUPPORT GUIDE

Following further announcements from HMRC, our business support guide has been updated to include changes to the grants Coronavirus Job Retention Scheme and the Self Employment Support Scheme.

FURLOUGH RECLAIM PORTAL

HMRC have advised that the mechanism for making claims under the Coronavirus job retention scheme will be up and running from next Monday.

We are aware that HMRC are sending out the email below to businesses. However, please note that the portal will not be available until next week at the earliest and further information is still to come.

However, we will require from you the information in points 1 and 2 and for those employees who have been furloughed, we will need to know when the furlough applied from and whether it is still applicable. If employees have been un-furloughed, please let us know as soon as possible.

Demand for this service will be high and we will do our utmost to make the procedure as simple as possible although until final details are published, we cannot yet provide definitive advice.

In order for us to make any claim on your behalf, we need to be registered not only as your payroll agent but as an Online Registered Agent. Despite our best endeavours not all of our clients are yet so registered so we may have to guide you through the procedures for you to make an early claim where this extra layer of  registration has not yet been completed

This is not yet the ”green light” that was needed to make the process speedy and simple. Here is the generic email issued so far:

“Dear customer,

We want to help you get ready to make a claim under the Coronavirus Job Retention Scheme.

If you’re eligible for the scheme, there are things that you can do now to be ready when the system is up and running later this month.

You’ll need to provide the following to make a claim:

1. The bank account number and sort code you’d like us to use when we pay your claim.

2. The name and phone number of the person in your business for us to call with any questions.

3. Your Self-Assessment UTR (Unique Tax Reference), Company UTR or CRN (Company Registration Number).

4. The name, employee number and National Insurance number for each of your furloughed employees.

5. The total amount being claimed for all employees and the total furlough period.

If you use an agent who is authorised to act for you for PAYE purposes, they will be able to make a claim on your behalf, so please speak to them now.

However, if you use a file-only agent (files your RTI return but doesn’t act for you in other matters), they won’t be able to make a claim for you and you’ll need the information listed above from them to make the claim yourself.

For more detailed advice, please visit GOV.UK. This guidance is being regularly updated, so please review it frequently.

You may also find this recorded webinar helpful, ‘Coronavirus (COVID-19) Job Retention Scheme’, available on HMRC’s YouTube channel.

We’ll email you again in the next few days with more details on how and when to access the online system – please do not try to do this until we let you know it is available.

We wish you all the best at this challenging time,

HMRC Customer Services”

Complete this Survey to Make Your Voice Heard

For this reason we have written to the Chancellor and the Shadow Chancellor expressing our concerns about job preservation and cashflow for our client groups. To make the collective voice of SME’s, owner managed and family businesses heard, we now urgently need data to support our position. 

As you know, we are members of the UK200Group, the UK’s leading association of quality assured chartered accountants and law firms. Whilst we welcomed the recent announcements by the Government to support businesses, we are very concerned that some of our clients will fall through the support net. 

Please fill our survey in – it will take less than 3 minutes to answer and no hard data is requested. 

CLICK HERE TO COMPLETE SURVEY

We would ask that the survey is completed by the 17 April 2020. We will then develop a report with the UK200Group, which will be shared with the Chancellor, the Shadow Chancellor and the Press. 

Thank you in advance. 

Kind regards and keep safe.

WE ARE ON YOUR SIDE!

Our UK200Group has been working collectively to assist our 150,000 SME clients through the current difficulties. I am a member of our Public Policy Group which meets regularly to see how we can influence the government to provide support for everybody. Last Friday, we submitted a letter to the Chancellor of the Exchequer which is attached and it is now also being sent to the newly appointed shadow Chancellor and other political parties.

Whilst we await a reply, we will be publishing press releases that are of urgent concern to all our clients as I believe that the government has a considerable amount more to do to safeguard our futures.

UPDATED – CORONAVIRUS BUSINESS SUPPORT GUIDE

Navigating the crisis

The Coronavirus (COVID-19) pandemic and associated shutdown has significantly affected many businesses. We know you may be suffering in terms of cash flow and face enormous uncertainty about the future for your business. We will do all we can to help you.

In the newsletter below we have brought together what you need to know about the Government help available for small businesses. HMRC is automatically deferring the next VAT and Income Tax bills, and it will agree extra time for you to pay Corporation Tax and PAYE, but those terms need to be negotiated individually.

Clarification on temporary changes to holiday entitlement

Given the government’s recent announcement in respect of the provision to carry forward holiday to the next 2 holiday years there seems to be some confusion or misunderstanding as to what this actually means. The Working Time (Coronavirus) (Amendment) Regulations 2020 amends the Working Time Regulations 1998 to create a further exemption relating specifically to COVID-19. Where it is not reasonably practicable for a worker to take some, or all, of the holiday to which they are entitled due to the coronavirus, they have a right to carry the 4 weeks under regulation 13 into the next 2 leave years.

Under the WTR, workers are entitled to 5.6 weeks’ paid annual leave per year (pro-rated for part time employees). This is made up of 4 weeks required under European law (Basic Leave), and an additional 1.6 weeks permitted under domestic legislation (Additional Leave). This entitlement includes bank holidays and is prorated in the year of joining. Some employees are entitled to more holiday under their contract of employment.

The WTR provides that workers must use their 4 weeks’ Basic Leave entitlement in the leave year in which it is due, otherwise the entitlement will be lost.

The government’s latest announcement applies to the 4 weeks’ Basic Leave. The government will amend the WTR so as to allow workers to carry-over up to 4 weeks’ holiday into the next two holiday years. This provision will apply where at the end of the year it has not been “reasonably practicable” for a worker to take some or all of this leave as a result of the effects of Coronavirus. Holiday in this case means taking a break from work and not the ability to use that time in any particular way i.e. travelling as opposed to staying at home.

The legislation previously prevented employers from allowing employees to carry forward unused basic statutory holiday entitlement to the next year.  Whilst the relaxation in the law is intended to enable employers to allow the carry forward for key essential workers to ensure they can continue the important work in hospitals, supermarkets or keep supplies flowing without losing the crucial time off they are entitled to it does apply to everyone. The “not reasonably practicable” requirement means that coronavirus will need to have had a genuine impact on the individual worker’s ability to take their leave for the carry over to apply, so this should not be used as a carte blanche by all employers to refuse or cancel holiday requests for the foreseeable future particularly if they are not significantly affected by the pandemic. The new rules do not make it an employee’s right to carry forward unused holiday but a relaxation in the law to enable employers to ensure key workers do not lose the essential time off which they have been unable to take due to the coronavirus outbreak or prevent the employer having a significant number of employees amassing holiday to take at a later date unless this is absolutely necessary.

The interplay between holiday and furlough leave under the government’s Job Retention Scheme is not clear. The Government guidance on the Coronavirus Job Retention Scheme confirms that employment rights still accrue whilst on furlough therefore we take this to mean that holiday will therefore continue to accrue however clarification is still awaited on this point.

ICAEW:

COVID-19: Directors on PAYE can furlough

31 March: Company directors that receive salaries through PAYE can be furloughed and apply for a grant of 80% of their salary during the coronavirus pandemic, ICAEW understands.

After examining HMRC guidance ICAEW believes that individuals who are directors of their own family companies and who are themselves paid via PAYE should be eligible for the coronavirus job retention scheme, although the same rules will apply as to other businesses and their employees.

Under the scheme, businesses are able to apply for government grants for employees’ salaries up to the lower of 80% of an employee’s regular wage and £2,500 per month for three months from 1 March. The scheme could run for longer if the restrictions in movements to halt the COVID-19 pandemic remain in place.

We are awaiting full details of how the scheme will operate from HMRC, including for directors paid via PAYE but not receiving a consistent, regular monthly salary. We understand the intention of the scheme is to include those on irregular earnings, but full details on how the amount of the grant will be calculated for these individuals have yet to be released.

As with other businesses, such directors would need to have been on the payroll on 28 February 2020 and they cannot work while they are on furlough leave. We do not yet know the extent to which minor directorial duties would be disregarded, or whether the requirement that a furloughed employee should do ‘no work’ would prohibit this.

https://www.icaew.com/insights/tax-news/2020/mar-2020/covid19-directors-on-paye-can-furlough