The Chancellor, Rishi Sunak continued with his campaign to support the business and jobs community today, 8 July 2020, as firms engage with the disruption caused by the coronavirus outbreak and the measures taken to control infection.

The main thrust of his announcements during his Summer Economic update concerned his nominated Plan for Jobs 2020, details are listed below.

He also announced measures to support the hospitality and tourism industry including a novel voucher scheme and a temporary reduction in VAT. Again, details are provided in the following update.

In an attempt to boost the flagging property market Stamp Duty is being temporarily reduced in England and Northern Ireland. Separate announcements on this topic are awaited for Scotland and Wales who have their own Stamp Duty regimes.

Details of these announcements follow:

1. Job Retention Bonus: employers that bring back an employee that was furloughed, and continuously employ them through to January 2021, will be paid a £1,000 government bonus per employee retained. Employees must be seen to be gainfully employed during this period and be paid at least £520 a month, on average, from November 2020 to January 2021. All furloughed employees returned to employment in this way will be available for the £1,000 bonus.
2. Kickstart scheme: this new scheme will cover the wages (plus associated costs) of new jobs created for any 16 to 24-year-old – at risk of long-term unemployment – for six months. These will have to be new jobs, of at least 25 hours a week and paid the National Minimum Wage. Employers will need to offer kickstarters training and support to find a permanent job. Employers can apply to be part of this new scheme from next month – August 2020 with first jobs starting in the autumn. Government has made an initial £2bn available for this scheme, but there is no cap on the number of places made available.
3. Apprenticeships: for the next six months government will pay employers to create new apprenticeships. The amount payable will be £2,000 for each apprentice. A new bonus to take on apprentices aged over 25 has also been announced. This will amount to £1,500 per appointment.
4. Green jobs initiatives: as an incentive to create jobs in the green jobs’ market a number of new grants have been announced. From September 2020, homeowners and landlords in England will be able to apply for a grant to make their home more energy efficient. The £2bn Green Homes grant will cover at least two-thirds of the cost up to £5,000 per household. For low income households these grants will cover all costs up to £10,000. There will also be a further £1bn allocated to make public buildings greener.
5. Boost for the housing market: Presently, in England and Northern Ireland (different amounts apply in the regions) no Stamp Duty Land Tax is payable on residential property purchases below £125,000. From today – for a temporary period to 31 March 2021 – this threshold is increased to £500,000. It is projected that this will reduce the average stamp duty bill by £4,500. Regional variations may apply. Purchasers buying a second residential property will still have to pay the 3% Stamp Duty Land Tax for property purchases up to £500,000.
6. VAT reduction for hospitality and tourism: for the next six months VAT charged on food, accommodation and attractions (such as eat-in or takeaway food in restaurants, cafes, pubs, cinemas, theme parks and zoos) will see VAT reduced from 20% to 5%. This will apply from 15th July 2020 until 12th January 2021.
7. Eat Out to Help Out discount: for the month of August 2020, meals eaten at any participating business Monday, Tuesday or Wednesday, will be 50% off up to a maximum discount of £10 per head including children. To access the discount businesses will need to register and can do so through a website to be opened next Monday, 13 July 2020. Businesses will be able to claim the money back weekly with the money in their bank accounts within 5 working days.

As we manage the cautious steps to emerge from lock-down, still wary of COVID-19, the new incentives announced by Rishi Sunak should be welcomed.

As more details emerge on the various schemes announced they will be published accordingly.

1 July 2020 – Due date for Corporation Tax due for the year ended 30 September 2019.

6 July 2020 – Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.

19 July 2020 – Pay Class 1A NICs (by the 22 July 2020 if paid electronically).

19 July 2020 – PAYE and NIC deductions due for month ended 5 July 2020. (If you pay your tax electronically the due date is 22 July 2020)

19 July 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 July 2020. 

19 July 2020 – CIS tax deducted for the month ended 5 July 2020 is payable by today.

1 August 2020 – Due date for Corporation Tax due for the year ended 31 October 2019.

19 August 2020 – PAYE and NIC deductions due for month ended 5 August 2020. (If you pay your tax electronically the due date is 22 August 2020)

31 July 2020 – Self-assessment second payment on account for 2019-20 is due. The government has announced measures that will allow many tax payers to delay this payment until January 2021, if they wish. 

19 August 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 August 2020. 

19 August 2020 – CIS tax deducted for the month ended 5 August 2020 is payable by today.

One aspect of the 1 July changes to the CJRS was the closing date to new entrants was set as 30 June 2020. This disadvantaged parents who had been on extended parental or maternal leave in recent months and were intending to return to work after 30 June.

The government has now confirmed that parents on statutory maternity and paternity leave who return to work in the coming months, after a long period of absence, will be permitted to be furloughed.

This will only apply where they work for an employer who has previously furloughed employees.

It is now confirmed that the UK will neither accept nor seek any extension to the Transition Period.

From 1 January 2020, the UK will have the autonomy to introduce its own approach to goods imported to GB from the EU.

Recognising the impact of coronavirus on businesses’ ability to prepare, and following the announcement in February that the UK would implement full border controls on imports coming into GB from the EU, the UK has taken the decision to introduce the new border controls in three stages up until 1 July 2021. This flexible and pragmatic approach will give industry extra time to make necessary arrangements. The stages are:

• From January 2021: Traders importing standard goods, covering everything from clothes to electronics, will need to prepare for basic customs requirements, such as keeping sufficient records of imported goods, and will have up to six months to complete customs declarations. While tariffs will need to be paid on all imports, payments can be deferred until the customs declaration has been made. There will be checks on controlled goods like alcohol and tobacco. Businesses will also need to consider how they account for VAT on imported goods. There will also be physical checks at the point of destination or other approved premises on all high risk live animals and plants.
• From April 2021: All products of animal origin (POAO) – for example meat, pet food, honey, milk or egg products – and all regulated plants and plant products will also require pre-notification and the relevant health documentation.

From July 2021: Traders moving all goods will have to make declarations at the point of importation and pay relevant tariffs. Full Safety and Security declarations will be required, while for SPS commodities there will be an increase in physical checks and the taking of samples: checks for animals, plants and their products will now take place at GB Border Control Posts.

A package of support to help high streets to get back on their feet was launched 12 June 2020. This announcement was made just days before shops were allowed to reopen on 15 June.

The High Streets Task Force will provide access to cutting-edge tools, training, information and advice for high streets across England as part of the government’s efforts to get shops open and back in business.

This support is open to local councils and all organisations involved with high streets and will include free access to online training programmes, webinars, data and intelligence on topics including recovery planning and coordination, public space and place marketing.

The support will form one part of the Task Force’s 4-year programme which will focus on the long-term transformation of town and city centres and helping communities reimagine and revitalise their high streets.

 

Last month we commented on the changes to the Coronavirus Job Retention Scheme (CJRS) that commenced at the beginning of this month (1 July 2020).

Now that we have the option to bring back employees on a part-time basis and still have a measure of support for their unpaid time, what considerations should we consider when planning the effects of the gradual unwinding of the CJRS?

Here are a few issues you may need to consider:

• Based on your present circumstances, what turnover levels are you likely to achieve from the end of this month?
• Apart from staff costs, what are your other fixed cost projections?
• You will need to account for the gradual impact of presently furloughed payroll costs as the CJRS unwinds towards close-down 31 October 2020.
• And last, but not least, have you created formal cash-flow and profit forecasts?

Armed with this information, you can then consider the combination of staffing levels that will allow you to at least breakeven from a profit perspective.

Planning is obviously paramount. If you have your account’s updated in real-time – using cloud based software – this will provide you with much needed data on which to base your decisions.

The UK economy seems set to break all records for reduction in output. As the 20% drop in May illustrates, we are descending into uncharted territory.

If you need help creating the necessary “what-if” planning reports, please call. There has never been more pressing need to make informed decisions. Delaying or ignoring this need is rather like driving blind-fold.

The Chancellor, Rishi Sunak has announced significant changes to the Coronavirus Job Retention Scheme, now commonly referred to as the furlough scheme. The scheme had been due to run until at least 30 June 2020. The Chancellor has now confirmed to the House of Commons that the furlough scheme will be extended for a further 4 months until the end of October and kept open for all sectors. By the end of October, the scheme will have been running for an astonishing eight months.

The Chancellor promised that the scheme will continue in its current form until the end of July. From 1 August until 31 October 2020, there will be greater flexibility added and employers encouraged to bring back furloughed staff part-time. However, employers will be asked to pay a percentage towards the salaries of their furloughed staff. We are told that further details on the changes to the scheme and information about its implementation will be published by the end of May.

The Chancellor was keen to stress that workers will continue to receive the same level of overall support of 80% of their current salary, up to £2,500 until the end of October. From August, employer payments will help to substitute the contribution the government is currently making in paying their employees. These measures should help to gradually encourage employees back to work and avoid the cliff-edge cut-off that has worried many businesses.

It was also revealed that the scheme has so far supported over 7.5 million furloughed workers and almost 1 million businesses. More than £10 billion has been claimed.

There are a number of important conditions that must be met in order for an employee to be classed as a furloughed worker. These conditions will continue to apply until the end of July 2020.

This includes the following:

• Employees must be notified that they have been furloughed.
• Employees must be furloughed for a minimum of three weeks.
• The employee cannot do any work for the employer that has furloughed them.

It was also rumoured that the Chancellor would announce changes to the support measures for the self-employed. However, no changes or extensions to the Self-employment Income Support Scheme were announced.

New statistics were also published that show businesses have benefitted from over £14 billion in loans and guarantees to support their cashflow during the crisis. This includes 268,000 Bounce Back Loans worth £8.3 billion, 36,000 loans worth over £6 billion through the Coronavirus Business Interruption Loan Scheme, and £359 million through the Coronavirus Large Business Interruption Loan Scheme.

The government also published the much talked about roadmap (11 May 2020) to help provide more information on the process of coming out of the lockdown without risking a second wave of infection. The roadmap discussed the development of new safety guidelines that set out how each type of physical space can be adapted to operate safely. This includes places of work that are beginning to reopen as restrictions are lifted.

The Department for Business, Energy & Industrial Strategy also published new guidance on 11 May 2020, titled ‘Working safely during Coronavirus (COVID-19)’.

The guidance provides information on making workplaces as secure as possible from the Coronavirus threat. This guidance applies to those who work in or run offices, contact centres and similar indoor environments and includes requiring employers to carry out risk assessments before they can reopen.

The guidance seeks to ensure that as many people as possible are able to safely follow social distancing guidelines at their places of work. Special consideration will also be given to those who are at higher risk or who need to self-isolate. The guidance further considers minimising the number of unnecessary visits to offices, cleaning workplaces, the use of PPE and face coverings, handling the workforce and goods entering and leaving work sites.

The Department for Transport has issued new guidance on how to make journeys safely in England during the Coronavirus outbreak. It provides guidance for walking, cycling, using private vehicles (for example cars and vans), and travelling by taxis and public transport (for example trains, buses, coaches and ferries). The guidance makes it clear that people should avoid using public transport where possible and instead try to walk, cycle or drive.

In many parts of the country, this may be easier said than done.

1 June 2020 – Due date for Corporation Tax due for the year ended 31 August 2019.
10 June 2020 – The final date that employers can furlough staff for the first time.
19 June 2020 – PAYE and NIC deductions due for month ended 5 June 2020. (If you pay your tax electronically the due date is 22 June 2020)
19 June 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 June 2020.
19 June 2020 – CIS tax deducted for the month ended 5 June 2020 is payable by today.
1 July 2020 – Due date for Corporation Tax due for the year ended 30 September 2019.
6 July 2020 – Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.
19 July 2020 – Pay Class 1A NICs (by the 22 July 2020 if paid electronically).
19 July 2020 – PAYE and NIC deductions due for month ended 5 July 2020. (If you pay your tax electronically the due date is 22 July 2020)
19 July 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 July 2020.
19 July 2020 – CIS tax deducted for the month ended 5 July 2020 is payable by today.

Government guidelines on this topic advise:
The amount of pay that a worker receives for the holiday they take depends on the number of hours they work and how they are paid for those hours. The principle is that pay received by a worker while they are on holiday should reflect what they would have earned if they had been at work and working.
A worker continues to accrue holiday entitlement while they are on sick leave, maternity leave, parental leave, adoption leave and other types of statutory leave. A worker may request holiday at the same time they are on sick leave.
The majority of the UK’s workforce are full-time workers on fixed hours and fixed pay. For these workers, typically on a fixed monthly salary, if they take a week’s holiday, they will receive the same pay at the end of the month as they normally receive.
The situation becomes more complicated when a worker does not work fixed or regular hours and so does not receive the same amount of pay each week, month or other pay period.
In these circumstances an employer should normally look back at a worker’s previous 52 paid weeks (known as the holiday pay reference period) to calculate what that worker should be paid for a week’s leave.
If a worker has not been in employment for long enough to build up 52 weeks’ worth of pay data, their employer should use the number of complete weeks of data they have. For example, if a worker has been with their employer for 26 complete weeks, that is what the employer should use.
If a worker takes leave before they have been in their job a complete week, then the employer has no data to use for the reference period. In this case the reference period is not used. Instead the employer should pay the worker an amount which fairly represents their pay for the length of time the worker is on leave. In working out what is fair, the employer should consider:
• the worker’s pay for the job
• the pay already received by the worker (if any)
• what other workers doing a comparable role for the employer (or for other employers) are paid

Since 13 May 2020, it has been possible to use online processes, accessed via the gov.uk website, to:
• Clarify if you are eligible to apply for the Self-Employed Income Support Scheme, and
• Lodge your claim. Payment should usually be in your bank account within 6 days.
Are you eligible?
By entering your unique tax reference number and National Insurance number you will be advised if you are eligible to make a claim and when you should do this. The link to this facility is on page https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference
However, there have been comments in the press that HMRC has had problems with the complex calculations involved in making this decision. If you were expecting to receive a payment under this scheme and are advised that none is available, you should challenge the outcome with HMRC.
Register your claim
If a claim is eligible you will be directed to register your claim by using your personal Government Gateway ID and password.
You will also need:
• UK bank details (only provide bank account details where a Bacs payment can be accepted) including:
• bank account number
• sort code
• name on the account
• your address linked to your bank account
Finally, you will be asked to confirm that your business has been adversely affected by coronavirus.
Note: claims for the first quarter to 31 May 2020 will close 13 July 2020
SEISS extended for final three-month period
It was announced 29 May that the SEISS would be extended for a further three-month period to 31 August 2020. Applications for this period will be opened late August 2020. The amount that can be claimed for June-August 2020 will be limited to 70% of eligible earnings capped at a maximum grant of £6,570.