Job Retention Scheme & Small Business Rate Relief Update
It has now been a couple of days since I last wrote and slowly some of the finer points are being clarified, so I hope this helps.
Clients who operate a payroll scheme
Under the Coronavirus Job Retention Scheme, all UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salaries for those that would otherwise have been laid off during this crisis.
This applies to employees who have been asked to stop working, but who are being kept on the pay roll, otherwise described as ‘furloughed workers’. HMRC will reimburse 80% of their salary, up to £2,500 per month. This is to safeguard workers from being made redundant.
In addition, the scheme will pay the employer National Insurance contributions and Auto Enrolment minimum employer pension contributions (capped at 3%). Making the total maximum payment £2,805 per month.
The Coronavirus Job Retention Scheme will cover the cost of salary, employer NI contributions and employer pension contributions backdated to 1st March 2020 and is initially open for 3 months, but will be extended if necessary. HMRC will set out more details shortly.
You must apply this in accordance with current employee contracts and employment law. If you do not have the option in their contracts to temporarily layoff staff you will have to consult with each member of staff and get their approval in writing to you reducing their wage/salary.
Note the April increase in minimum wage will not apply as the staff are not working!
For our clients who are Owner/Director and sole employee in lack of black and white guidance the consensus is that Directors can be furloughed as long as they are working ON and not IN the Company.
Thus, you should not be doing any work that is income generating, but you have no excuse not to keep your accounting records up to date 😊
Finally, you have to be furloughed for a minimum period of 3 weeks. I will be speaking to each of you closer to running the April payroll and when we have details that the HMRC portal is up and running for claims for reimbursement.
Businesses in receipt of Small Business Rate Relief
I understand that Cornwall Council has begun to release the letters advising clients that they should check their eligibility to claim the grant and respond direct to the Council by a certain date. I would urge you to do this ASAP. If your letter has not been sent to your home address but to the business premises that is not accessible because of the isolation you will need to ring 0300 1234 171 to explain the situation.
I am sure many other councils will be doing the same so if you have eligible business premises, keep your eyes out for this letter and respond.
Support for the self employed
Nothing further to add at this time other than HMRC will contact people who are eligible in June.