As week 4 of the UK lockdown draws to a close, it appears likely that it will continue for several more weeks yet.
While nothing substantively new has been announced this week in terms of financial support packages, we have seen a number of clarifications coming out, and some support starting to reach businesses. Local councils have begun contacting businesses eligible for the rates rebates and small business grants and money has started to be passed to those businesses.
Coronavirus Job Retention Scheme
The claims portal for the Coronavirus Job Retention Scheme (CJRS) is due to go live on Monday, and it is likely to be inundated as soon as it goes live, so it is to be hoped it will be robust enough to cope with the volume of claims that it will be handling.
On the CJRS, we have had one extension this week in particular. Previously, to be eligible, a business had to have a PAYE scheme by 28 February 2020, and to be able to furlough an employee they needed to be on the payroll by that date. This date has now been moved to 19 March 2020, and while this is only a movement of less than three weeks, it should bring many more new businesses within the scheme. However it is unclear how much this will really help in terms of additional employees, as the requirement is that a Real Time Information (RTI) submission in respect of an employee must have been made by 19 March in order for them to be eligible for furlough. For monthly paid employees who started in early March, it’s unlikely that an RTI submission would have been made by that point.
Self-Employed Income Support Scheme
Some more guidance has come out in relation to the Self-Employed Income Support Scheme (SEISS) too. There is a confirmation that the deadline for filing a 2018-19 tax return, for those who are late and have not already filed it, remains 23 April 2020 (next Thursday) and this is a hard deadline – any individuals who fail to file by that date will not be eligible for the support scheme at all.
Some examples have been given to illustrate how the support will be calculated, including confirmation that loss making years are included to calculate the average of the last three years of profits (e.g. two years of £60,000 profit and one year of a £30,000 loss gives an average of £30,000 profit – 60+60-30 divided by three – less than £50,000 therefore eligible). This is what many assumed would/should be the case but it’s good to see this in black and white from HMRC.
Finally, and this is a very important point, the latest guidance again says that the scheme is for self-employed individuals or partners in partnerships who have lost income as a result of Coronavirus and that HMRC will take a “risk-based approach” to compliance. This means it is crucial that before applying for the support, individuals must be comfortable that their profits have indeed been adversely affected, and must be ready to prove this at a later date should HMRC launch an enquiry into the 2020-21 tax return in due course. If the filed tax return shows profits that look like they would have been at “normal” levels without the support, it’s likely that HMRC will enquire into the return and seek to get the support back, with the potential for interest and substantial penalties at that point.
It’s barely more than a throwaway sentence in the guidance, but after the crisis has passed HMRC are going to be more keen than ever to raise additional tax revenue for the Exchequer, so we believe this is an extremely important point to consider before claiming.
Internally, we have been working on a calculator for the SEISS, so any of our clients who would like some idea of what they might be eligible for can contact us for a steer on this.
Coronavirus Business Interruption Loan Scheme
Will Abbott has launched a CBILS checklist for those who are looking to apply for the Business Interruption Loan Scheme, do have a look at this and contact Will if you would like any support in putting an application or supporting information together.
In Focus – the ‘remote working’ issue
Our Spring/Summer edition of In Focus is also now available online, and includes much more detail on financial measures from the Budget and since then, so is worth a read if you haven’t already.
We remain fully open for business (remotely) so please do call with any questions around your current financial situation. Enjoy your weekends as safely as you can.
James Geary is head of Corporate Tax and is happy to help with any questions or concerns you may have at this time – you can contact James on email@example.com or 01242 776000 to arrange a call back.