As the virus outbreak increases, the government is catching up and constantly altering or adding to policies. If you are aware of any part of this page that is out of date, please email us and alert us and it will be updated.
Live Government Updates
The Government is running 4 frequently updated pages, keep an eye on them daily:
Our Working Arrangements During The Lockdown
During the lockdown period, we will strive to provide a faultless service with minimal interruption. ~ our arrangements to achieve this are as follows:
Office
The office is closed for the duration of the lockdown period, although the mailbox will be checked most days. See below for info about file dropoff, telephoning us and suchlike.
Team
We are all working from our homes, use a virtual office, team chat, regular video meetings & can access all required data from within our homes. It's almost "business as usual", we will be here to assist you as normal.
File Drop-Off
If you can prep your paperwork into 1 inch packets, they can be dropped off via the letterbox at the front of the building. If you have anything larger to drop off please email me and will arrange an alternative.
You can still email us on office@ontax.co.uk We will reply as soon as we can.
Cloud Phone
We use BT Cloudphone so our office numbers transfer through to our mobiles. Each of us can be reached individually. For tel numbers please email and request.
Video Meetings
During lock down no meetings will take place. We can though offer video meetings to select clients. Please email for further details
Corona Virus Job Retention Scheme (CJRS)
Corona Virus Job Retention Scheme (AKA "Furlough Pay")
The "Coronavirus Job Retention Scheme" can be accessed by all UK employers. The scheme will allow employers to pay part of their employee's salary where these employees would otherwise have been laid off due to the coronavirus.
Definition Of Furloughing
- To "furlough" an employee means to grant them a "leave of absence", this at least is a dictionary version of the word. HR law though is a little vaguer with the closest concept being to "lay off" a worker, temporarily.
- Most employers contracts of employment do not include clauses for laying workers off, therefore the employee has the right to negotiate with you. Given that an employee can be made redundant for a shortage of work and taking into account the current environment we live in, most employees would rather settle for being furloughed at 80% of their gross wage (perhaps with an employer top-up) than to be made redundant. After all, who doesn't want a long (mostly paid for) holiday as an alternative to redundancy?
Eligibility For The Grant
- You will need to designate the affected employee as a "furloughed worker", notifying the employee in writing of this change. You should be aware that the change in the employees employment status is still subject to employment law and therefore may be open to negotiation with the employee.
- Whilst being furloughed, an employee should not undertake any work at all. Not even answering an email or taking a call from a customer. They have to be truly "laid off". Whilst furloughed, the employee is still employed by the employer from an HR and employment law perspective.
- An employee must be furloughed for a minimum of three weeks to be eligible for a claim.
- You can claim for employees that were employed as of 19 March 2020 and were on your PAYE payroll on or before that date; this means that you will have made an RTI submission notifying HMRC of payment of that employee on or before 19 March 2020.
- The scheme also covers employees who were made redundant since 28 February 2020, if they are rehired by their employer.
What About Directors?
- Directors can furlough themselves and obtain the 80% deal that HMRC has offered to employees.
- Any Director taking the tax free allowance as his salary would get 80% of his gross wage. They will not get anything in respect of the dividends they have taken. In other words. Directors may need to consider Universal Credits as a way of topping up their government assistance.
How Much Will The Employer Get?
- HMRC will reimburse 80% of the furloughed workers gross wage costs, capped at £2,500 per month (per worker). We strongly suspect HMRC will use already submitted payroll data to arrive at the workings (thus any "cash in hand" businesses operating outwith the law shall only get 80% of the declared payroll to date).
What About Employers National Insurance And Auto Enrolment?
- The Employers National Insurance associated with the 80% paid under the "Job Retention Scheme" is recoverable from HMRC.
- The employer can include in the grant claim 80% of the minimum automatic enrolment employer pension contributions.
How Will It Be Calculated?
- It's unclear whether HMRC will take account of historical pay data or simply the amount you will pay the employee each month from 1 March 2020. We await clarity on the matter. (We must assume the historical aspect will be considered to stop fraud arising from "sudden" pay rises to furloughed workers).
Employee Salary Reduction
- If the employees salary is reduced due to this, they may be eligible for other benefits such as Universal Credits.
How & When Will The Employer Get The Money?
- Currently, HMRC has no mechanism to reimburse employers and are building the system to accommodate this. Initially we suspected the money would be sent directly to the employees bank account but as of 30/3/20 we are hearing that the employer will receive these funds directly, initially in arrears.
How Long Will The Scheme Run For?
- The scheme is set to run for 3 months from 1 March 2020, it is most likely the scheme will be extended after that.
What is The Process For Furloughing An Employee?
- If you already have a furloughing "Lay-off" clause in the employment contract already - a letter will need prepared confirming the instigation of this clause. Details of the furlough period and amount to be paid will be required. (Seek HR advice before doing this).
- If you do not already have a furloughing "Lay-Off" clause in the employment contract - a letter will need prepared proposing to furlough the employee and obtaining their acceptance of it. Details of the furlough period and amount to be paid will be required. (Seek HR advice before doing this).
Need A Letter To Furlough An Employee?
It's easier than you think!
What To Do Now
- Right now, the best thing you can do is discuss the concept of furloughing with relevant employees. We can put you in touch with specialists in HR and employment law who will help you free of charge right now so that you can make an informed decision. Be aware that the employee could have a claim against you under constructive dismissal so taking HR advice (From HR advisors, not us, your Accountant) is imperative.
- Also, make sure you have a Government Gateway account setup, working and with the PAYE service activated so that you are ready should the government use this route to process the payments to you. If you wish, we can set this up for you (fee-able).
- Ensure all employee data (addresses etc) are up to date with us and that you have their bank account details (because it is possible the payment will bypass you and go directly to them).
The Process
If we undertake your payroll, the process you need to follow is:
- Issue furloughing letters to your employees
- Let us know the date each employee was furloughed
- Confirm the gross furlough amount to be paid by you to them (80% of their gross pay)
- An employer can only submit one claim at least every 3 weeks, which is the minimum length an employee can be furloughed for. Claims can be backdated until the 1 March if applicable.
Once HMRC have received the claim and the employer is eligible for the grant, HMRC will pay it via BACS payment to a UK bank account.
- The payslip should show furlough pay as a separate line item.
Useful Links
Self-Employed Income Support Scheme
For Those Who Have Been In Business 3 Years
The Self Employed
What Can I Get?
- Self-employed workers (Not those running their own Ltd Co's though) can get a grant (taxable) worth up to 80% of the average monthly profits for an initial period of 3 months (March-May 2020). Payouts start at the beginning of June.
Qualifying Factors
- You need to have been trading for at least a year (and submitted the last 3 years tax returns)
- If you are late submitting your 2019 Self-Assessment tax return (due date for submission was 31st January 2020) you can still submit it by 23rd April 2020, for the figures to be included in the grant calculation.
- Trading profits to be less than £50,000 in the18-19 year or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19.
- At least half of your income needs to have come from self employment as registered on the 18-19 tax return.
- This scheme also applies to members of partnerships
When Will It Be Paid?
- It will be paid directly into your bank account by HMRC at the end of June. In the statement the chancellor said "it will be paid in a single lump sum". Again, no detail on whether this means the entire months allowance or indeed a clock payment representing say 3 months grant. We await clarity on the matter.
How Is It Calculated?
- Your profits for the last 3 years will be averaged by adding the 3 years trading profit together and dividing by 36. (Profit is all sales minus all tax-deductible expenses).
- If your taxable profits in the last 3 years were lower due to buying plant (i.e a van etc) then this will be taken into account by HMRC likely resulting in the amount you receive from the grant being less than it could have been.
- Those earning £50,000 or less must wait until June to receive up to £2,500 a month at which point it will be backdated to March.
- 80% of earnings will be covered by the state, up to a maximum of £2,500 a month for three months. this will be backdated to March and covers those earnings up to £50,000 or 95% of the self-employed
- Self Employed people can claim Universal Credits or the new Employment And Support Allowance, as long as the relevant criteria is met.
- The Government understands the hardship you are under and the need to isolate without the pressure to work, therefore they have relaxed the minimum income threshold for now. The change applies to all Universal Credit Claimants for the duration of the coronavirus outbreak.
- If you believe that you may be due a tax rebate for the prior tax year (i.e you have not submitted the 2019 tax return, or you believe that you have overpaid your "payments on account" for the 19/20 year as a direct result of reduced trading, please speak to us. It is possible we can get a tax rebate for you.
Other Factors
- The chancellor has stated "the self-employed can continue to work as they receive support". Given the advice to self isolate, "necessary travel" only etc, its hard to see how this will work for many.
Useful Links
Getting Access To The Scheme
- Application is done through a simple online form. To minimise fraud, only those who are already in self-employment and meet the above conditions will be eligible to apply. HMRC will identify eligible taxpayers and contact them directly with guidance on how to apply.
- Individuals should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational.
Rates Relief
Rates Relief
For the 2020-21 financial year, the Government has announced a support package for businesses. These are:
- 100% rates relief for retail, hospitality and leisure sectors with a rateable value of
less than £69,000 from 1 April 2020
- An £80 million fund to provide grants of at least £3,000 to small businesses in sectors
facing the worst economic impact of COVID-19
- A fixed rates relief of up to £5,000 for all pubs with a rateable value of less than
£100,000 from 1 April 2020
- £10,000 of grants for small businesses in receipt of the Small Business Bonus Scheme or
Rural Relief
- 1.6% rates relief for all properties across Scotland, effectively reversing the planned
below inflation uplift in the poundage from 1 April 2020
- £25,000 grants for hospitality, leisure and retail properties with a rateable value
between £18,001 and £50,999
- All businesses who have not already qualified for 100% rates relief will not be subjected to the proposed increases in the 20-21 year, this has now been shelved.
Business Who Pay Little Or No Rates At All
- The government will provide additional Small Business Grant Scheme funding for local
authorities to support small businesses that already pay little or no business rates because
of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will
provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing
business costs.
- If you are eligible, the local authority will write to you with further detail. Alternatively, you can apply here:
Vat Assistance
Vat Assistance
- HMRC have indicated that they will defer VAT payments for 3 months.
- Confusingly the chancellors statement is " I am deferring the next quarter of VAT payments. That means no business will pay any from now until the end of June; and you will have until the end of the financial year to repay those bills." This does not tell us about the vat submission, only the payment. It is implied though (given the "stay at home" warnings) that submission is also deferred, but we are not certain. Lacking any useful clarity on the matter we advise submitting your vat return on time (which means breaking the governments "stay at home" warning in order to get paperwork to your accountant), even if not paying it.. The statement hints at making "some payment" for now, with full payment being due by the end of the financial year i.e 31 March 2021. Typical HMRC, nothing is ever black or white with them, we await further clarity from them!
- There implementation of the next stage of MTD (digital record submission) has been delayed a year, this is good news for us all!
What To Do Now
- If you pay VAT by direct debit, consider cancelling the DD for now (otherwise any submission made may trigger a DD payment that could otherwise have been deferred.
- Ensure you get your vat paperwork and data to us in time. please email first though as the office is not always necessarily open during this trying time.
Taxes - Time To Pay
Getting More Time To Pay Taxes
All people and businesses experiencing financial hardship and who have outstanding tax liabilities can discuss extended time to pay with HMRC on 0800 0159 559
Useful Links
Insurance
Insurance Payout
If your insurance has any of the following;
- Pandemic Cover or
- Government Ordered Closure Cover or
- Business Interruption Cover
You should be able to make a claim. Most pubs, clubs and suchlike are eligible for one of these.
Debt Help
Debt Help
We know this is a hugely distressing time to many business owners who have crafted their business putting every effort into it only for a virus to come along and decimate everything. We sympathise and feel for you and will try everything we can to assist.
Whether the debt is corporate, personal or otherwise, please contact us and we can refer you to professional advisors who can assist.
Business Interruption Loan
Business Interruption Loan
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- The temporary Coronavirus Business Interruption Loan Scheme (CBILS) supports SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years.
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- The government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.
Bounceback Loans (BBL)
The Bounce Back Loan Scheme, launched in May 2020, has been introduced to help smaller businesses impacted by coronavirus (COVID-19). It aims to assist businesses to borrow between £2,000 up to 25% of a business’ turnover (the maximum amount available is £50,000).
Government will cover any interest payable in the first 12 months through a Business Interruption Payment to the lender, and lenders benefit from a 100% government-backed guarantee.
The government has set the interest rate for this loan at 2.5% per annum and the repayment term is fixed at six years. No repayments are due during the first 12 months. Businesses remain 100% liable to repay the full loan amount, as well as interest, after the first year.
The Scheme is delivered through a network of accredited lenders.
The business must confirm to the lender that the loan will only be used to provide an economic benefit to the business, for example providing working capital, and not for personal purposes. (It is most likely that the BBL T&C's will be very specific about what the monies can be used for, business owners will need to take heed of this as by the time annual accounts are prepared it may be too late to correct the situation). At this point, the full T&C's are unknown as the details are yet to be fully released, the general advice being to check them once they are issued to you.
Business owners should beware of taking this money personally whether via payroll or (especially) via dividends, benefits and/or loans to themselves. This can potentially give rise to "illegal dividends" or overdrawn Directors Loan Accounts with a hefty 25% tax bill on this amount. This may mean keeping a very detailed account of the funds remaining in the business at any time and referencing this prior to moving company monies to personal bank accounts of directors, owners and/or related parties and shareholders.
Insolvency Practitioners are urging caution in the use of this loan with the belief being that any business owner obtaining one of these loans and withdrawing it from the business for personal use/gain (which might in itself cause the companies insolvency) might find themselves being ordered by the courts to repay the money back to the company as it is not being provided for the enrichenment of the business owner but rather for business cashflow purposes. This extends to any assets bought in the business owners name but being used in the business where the item is financed personally, as far as the law is concerned the debt is personal, so BBL's cannot be used to settle personal debt on business assets.
More info on bounceback loans can be obtained here: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/faqs-for-small-businesses/
Late Company Accounts
Filing Company Accounts Late
If your company accounts filing deadline is looming you need to act now. The irony is that the Government is ordering people to stay home (implication: you, your accountant etc) and yet they are not letting you off the hook so easily with statutory duties.
The workaround just now is that the government are asking you to apply for more time ( 3 month extension) to file them (for some reason they seem incapable of helping us all by doing this automatically at source). Anyway, my jibes at their incompetence aside, there is a process for doing this, that as a director you need to follow, see below link.
As long as you cite the reason for the extension as being Covid19, the extension will be automatically granted. It's unclear whether the government will ease the penalties that surround late submissions.
Useful Links
Child Benefit
Child Benefit
If your income has dropped as a result of the Corona Virus, perhaps now would be a good time to review whether you qualify for assistance. See link below.
Useful Links
Beware Of The Scammers!
Covid-19 Tax Scam Alert
We are seeing new examples of scams, some offering "Covid 19 tax rebates", some links to alleged NHS sites as well. Please be advised that there are no communications we know of (paper, phone, email or otherwise) where HMRC are pro-actively offering you a tax rebate or refund. Any tax rebate communication via SMS or Email purporting to be from HMRC is almost definitely a scam.
Also, beware of "lookalike" government pages that ask for personal data specifically bank data. Scammers have no conscience and will happily use this time to take your money. BEWARE!