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Accounting for COVID 19: six new developments you need to know about

Business Control’s Richard Starkey outlines the latest news for business owners…

 

1) Don’t forget to pay your payroll tax

Before we look at the news relating to the Coronavirus Job Retention Scheme, it’s worth touching upon deferred payments. As you may know, HMRC have made a number of welcome announcements in recent weeks aimed at companies that cannot make their statutory payments due to COVID 19. For example, you can delay any VAT payments due between 20 March 2020 and 30 June 2020, and if you choose to defer a VAT payment, you will have until 31 March 2021 to pay it. Click here for more details.

  

However, there is no guidance on deferring PAYE payments (‘payroll tax’) and you’ll need to ensure this is still paid for the foreseeable future.

 

2) Furloughing requires a consultation process

If you’re going to take advantage of the Coronavirus Job Retention Scheme (CJRS), whereby you furlough members of your staff, you have to notify them and (unless there’s an express lay-off clause in their employment) they’ll need to agree to be furloughed and to only be paid 80% of their salary while this happens. To formally agree this, both parties will have to sign a Furlough Leave Agreement, which will also confirm the circumstances that will end furlough leave, and may also include a lay-off clause for any future reductions in work.

 

3) You’ll need to claim back your furlough wage costs

It is the employer’s responsibility to first pay furloughed workers (at 80% of their basic pay before bonuses or overtime) and then claim the money back from the government. If cash flow is likely to be an issue, there are government loans available – and of course, redundancy is still an option. Employees can still be made redundant while on furlough or immediately after.

 

4) Furloughing operates on a three-weekly cycle

The minimum amount of time you can furlough a worker is three weeks and we believe that you, as an employer, will be able to claim your salary expenses in three week increments via an online portal (this is still to be confirmed). The maximum amount of time is three months, although this may well change depending on the economic outlook.

 

5) Furloughing operates on a three-weekly cycle

As the needs of your business change over the coming months, you are able to bring staff in ‘off furlough’ and, if you like, put other staff ‘on furlough’. You’ll need to stick to the three-week rule and, don’t forget, furloughed staff cannot work for you in any fee-generating capacity while furloughed.

 

6) We can prepare your CJRS claim for you

While we’re yet to see the online portal for making claims, HMRC are aiming to get the scheme up and running by the end of April. To submit a claim, it’s very likely you’ll need the following information (and don’t forget, at Business Control, we can help you with all of this):

  • Number of employees being furloughed
  • Their ePAYE reference number(s)
  • Start and end dates of the claim period 
  • Total amount claimed (per three-week period)
  • Bank account number & sort code
  • Your contact details

 

7) Bonus development!

We have just found out that self-employed workers CAN still work while they’re getting paid their 80% average profits allowance (which is different from employed furloughed workers who cannot work). Watch this space for details…

 

Don’t forget to check out the rest of our Accounting for COVID-19 blogs here, and please check back periodically to get the very latest insight and information from the Business Control team.

 

Better still, you can access a whole host of resources for business owners including blogs, smart guides and infographics for free. Simply opt in here

 

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