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Changes to CJRS – the furlough scheme

How will the changes announced in June 20 impact your business?

Changes to the Coronavirus Job Retention Scheme (CJRS) announced in June will see furloughed staff being able to return to work part-time, an end to adding new staff to the scheme from 10/6/20 and the amount of Government support reducing gradually from August 20.

What changes for the CJRS and when?

The  CJRS will close to new employees who have not previously been furloughed, from 10th June, and the scheme closes completely at the end of October 20th.

  • A system of flexible furlough/ part-time working will come into effect from 1 July, allowing employers to bring back furloughed employees for any amount of time on any shift pattern, while still able to claim a grant in respect of the time not worked when they would normally have worked.
  • As and employer you will have to pay employees at their usual rate of pay for any hours they work, and pay the Employer National Insurance Contributions (NICs) and minimum employer automatic enrolment pension contributions that this pay attracts.
  • You will need to reach new flexible furlough agreements with any furloughed employees brought back on a part-time basis. Ask an HR adviser or edit the letter you used for furlough leave.
  • From 1 August, CJRS grants will cease to cover Employer NICs and pension contributions, with this cost passing to employers. The grant will continue to cover 80% of furloughed employee’s usual wages, up to the cap of £2,500 a month.

When does the CJRS Grant start to reduce?

From September, the value of the grant will fall to 70% of a furloughed employee’s usual wages, capped at £2,187.50 a month. Employers will pay the remaining 10% plus NICs and pension contributions to reach a combined total payment to the employee of 80% of their usual wages, up to a cap of £2,500 a month.

From October the CJRS grant from the Government reduces to 60%, capped at £1,875 a month, with employers paying 20% of a furloughed employee’s usual wages plus NICs and pension contributions to reach the total of 80%, capped at £2,500 a month.

No new entrants to the CJRS from 10 June

The government has announced the closure of the scheme to new entrants from 30 June. After this point, employers will only be able to furlough employees who have been furloughed for three full weeks at any point before 30 June.

This means the last day an employer can furlough an employee for the first time will be Wednesday 10 June.

Also, after 30 June, employers will not be able to claim for more employees in a claim period than the maximum number they have claimed for in any period under the scheme in its current format.

Getting Back to Business after Lockdown

Details of the CJRS after June                            

Details from HMRC are expected to be announced on 12th June 2020.

What records do you need to keep?

HMRC have announced clearer, updated record-keeping requirements of the scheme.

The written agreement that the furloughed employee will, under the current terms of the scheme, cease all work must be retained until 30 June 2025. Also the agreement must

  • State the main terms and conditions
  • Be incorporated either expressly or implicitly in the contract of employment – most employers have a separate agreement signed by the employee.
  • Be either made or confirmed in writing – get your staff to sign it.

Changes to Job Retention Scheme

Be aware – Expect an HMRC audit of furlough Grant Claims

It is widely expected that HMRC will audit use of the scheme retrospectively over the coming months and years, with potentially large penalties and possibly prosecution for those found to have acted improperly.

HMRC have opened a whistleblower online portal for individuals to report employers who have acted improperly, especially those who have claimed grants for staff who continued to work for the business.

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/report-fraud-to-hmrc

If you need help to work out what you can claim please call us on 01603 516 304 🙂

Covid 19 – Coronavirus Statutory Sick Pay Rebate Scheme Opens

Coronavirus SSP scheme open for claims

Statutory Sick Pay Rebate Scheme launches 26 May 2020

Small and medium-sized employers, with less than 250 employees, will be now be able to recover up to 2 weeks’ Statutory Sick Pay, per eligible employee, for sickness absence paid due to coronavirus.

The key points are;

  • As expected employers will be able to make their claims through a new HMRC online service from 26 May.
  • Employers will receive repayments at the relevant rate of SSP that they have paid to current or former employees for eligible periods of sickness starting on or after 13 March 2020.
  • Your accountants / tax agent can also be able to make claims on behalf of employers.
  • To prepare to make their claim, employers should keep records of all the SSP payments that they wish to claim from HMRC.
  • Employers are eligible if they have a PAYE payroll scheme that was created and started before 28 February 2020 and they had fewer than 250 employees before the same date.

The repayment will cover up to 2 weeks of SSP and is payable if an employee is unable to work in the following circumstances;

  • Employees have coronavirus; or
  • are self-isolating and unable to work from home; or
  • are shielding because they’ve been advised that they’re at high risk of severe illness from coronavirus.

Working From Home during coronavirus

SSP Rebate Scheme Other Useful Info

The current rate of SSP is £95.85 per week. For the period 13 March 2020 to 5 April 2020 the SSP rate was £94.25 per week, so pay attention to the dates you are claiming for.

Employers can choose to go further and pay more than the statutory minimum, this is known as contractual sick pay.

Where an employer pays more than the current rate of SSP in sick pay, they will only be able to reclaim the SSP rate.

The scheme covers all types of employment contracts, including:

  • full-time employees
  • part-time employees
  • employees on agency contracts
  • employees on flexible or zero-hour contracts

All other SSP eligibility criteria apply, check out the link to HMRC to check eligibility.

Connected companies and charities can also use the scheme if their total combined number of PAYE employees is fewer than 250 on or before 28 February 2020.

Employees do not have to provide a doctor’s fit note for their employer to make a claim under the scheme.

But you can ask them to give you either an isolation note from NHS 111 and if they are self-isolating and cannot work because of coronavirus you can ask for the letter from the GP.

Employers can furlough their employees who have been advised to shield in line with public health guidance and are unable to work from home, under the Coronavirus Job Retention Scheme. Once furloughed, the employee should no longer receive SSP and would be classified as a furloughed employee.

You can claim back from both the Coronavirus Job Retention Scheme and the Coronavirus Statutory Sick Pay Rebate Scheme for the same employee but not for the same period of time for that employee.

SSP Claims and State Aid Rules 

Your claim amount should not take you above the state aid limits under the EU Commission temporary framework. This is when combined with other aid received under the framework. The maximum level of state aid that a business may receive is €800,000. There is a lower maximum for agriculture at €100,000 and aquaculture and fisheries at €120,000.

Small Business help during Coronavirus

What you’ll need to make your Coronavirus SSP claim

You’ll need:

  • your employer PAYE scheme reference number.
  • contact name and phone number of someone we can contact if we have queries.
  • UK bank or building society details.
  • the total amount of coronavirus SSP you have paid to your employees for the claim period – this should not exceed the weekly rate that is set.
  • the number of employees you are claiming for.
  • the start date and end date of the claim period.

You can claim for multiple pay periods and employees at the same time. The start date of your claim is the start date of the earliest pay period you’re claiming for. The end date of your claim is the end date of the most recent pay period you’re claiming.

SSP Records you must keep

You must keep records of SSP that you’ve paid and want to claim back from HMRC under the new scheme.

You must keep the following records for 3 years after the date you receive the payment for your claim:

  • the dates the employee was off sick.
  • which of those dates were qualifying days
  • the reason they said they were off work – if they had symptoms, someone they lived with had symptoms or they were shielding.
  • the employee’s National Insurance number.

You can choose how you keep records of your employees’ sickness absence. HMRC may ask to see the records. Consider scanning any sick notes your are given and keep any e-mails where staff tell you they are sick or shielding.

HMRC will close this service when they choose.

For any help with payroll or Statutory Sick Pay please call us on 01603 516304 🙂

Coronavirus Hope

Covid -19 Bounce Back Loan Scheme Live from 4/5/2020

Bounce Back Loan Scheme advice for Norwich business

Bounce Back loans will be available for applications from 9am on 4 May 2020.

Up to date as at 2/5/20; Scheme launch date 4/5/20
Under the Bounce Back Loan Scheme (BBLS), the Government announced that the smallest businesses will be able to borrow between £2,000 and £50,000 – capped at 25% of a business’s turnover. The loan will be 100% guaranteed for lenders, by the Government.
The Bounce Back loans are separate to the previously announced Coronavirus Business Interruption Loan Scheme (CBILS), which allows SMEs to apply for a loan of between £50,001 and £5 million, and which is backed by an 80% government guarantee.

Eligibilty for a Bounce Back Loan

  • Sole traders, partnerships and limited companies can apply. If your business meets all the following criteria you may be eligible for a loan:
  • Based in the UK.
  • Business is impacted by Coronavirus / Lockdown
  • Was not classed as an “undertaking in difficulty” as of 31 December 2019. If you don’t know your situation at 31/12/19 ask you accountant to help you or look at your software at that date to see what’s what.
  • Certain companies cannot apply, like banks, insurers and reinsurers (excluding insurance brokers), public sector bodies and state-funded primary and secondary schools.

Help for business - Covid-19

How do I apply for a Bounce Back Loan?

The expected process is;

  • Companies can apply through a short online form.
  • Many banks will provide access via on-line banking for existing customers e.g Barclays Bank have announced this.
  • The online form will contain minimal checks, with no need for a credit check or an investigation to ensure the company is financially viable. There is also no requirement for a business plan.
  • Some fraud checks will still apply.
  • If the application is approved, the funds should be in the company’s account within 24 hours.

What are the Bounce Back Loan terms?

  • Interest-free for the first 12 months, and no repayments due within this period.
  • 100% backed by the government, for the lender.
  • No arrangement fees or early repayment charges.
  • Maximum term of the loan is six years.
  • Interest rate expected to be set at 2.5% p.a.

What if I have already had a CBILS loan approved?

You cannot apply to both the CBILS and the Bounce Back schemes.
If you have a CBILS loan of up to £50,000 you can ask to move it to a Bounce Back Loan.

More details will follow on and after the 4/5/20 and first applications are expected to be made on Monday the 4th

Stay up to date with the Government announcements here;
https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan

If you need advice please get in touch and we can help you consider how Coronavirus has impacted your business and if a loan is the answer for you.

Call 01603 516 304