When it commenced the furlough scheme meant that furloughed workers must not carry out any work for their employer.

This will change from 1 July. Employers will be able to bring back furloughed workers on a part-time basis. The employer must pay the employee in full for the hours worked but can continue to claim the Coronavirus Job Retention Scheme (CJRS) grant for the furloughed hours.

The furlough scheme will close to new entrants on 30 June. As employers will then only be able to furlough employees who had been furloughed for a full three week period at 30 June this means the final date for furloughing an employee for the first time is 10 June. Claims for the period to 30 June must be made by 31 July. The scheme will continue until 31 October 2020.

At present the government is contributing to the wages, National Insurance (NI) and pension contributions of furloughed employees to ensure that they receive 80% of their salary, up to £2,500 per month. Employers can choose whether to pay any additional amount.

From 1 August the government will reduce their financial support with employers having to make contributions to ensure that employees receive at least 80% of their salary, as previously.

In August the government will pay 80% of a furloughed employee’s salary, up to £2,500 per month. Employers will be responsible for the Employer’s NI contributions and pension contributions.

In September the government will pay 70% of a furloughed employee’s salary, up to a reduced cap of £2,187.50 per month (ie 70% of the £3,125 gross maximum). Employers will be responsible for the Employer’s NI contributions and pension contributions and a contribution towards wages, to bring these up to 80% of the £2,500 CAP. eg Maximum £3,125 x 80%, government was paying £2,500. £3,125 x 70%, government pays £2,187.50, employer pays £312.50, employee receives £2,500 as previously.

In October the government will reduce its contribution to 60%.

With retailers starting to open this month for many businesses this reduction in support may not make a lot of difference.

At present it is thought beauty parlours, hairdressers, pubs and restaurants may be able to open in July. Social distancing measure are, however, likely to substantially reduce their income from pre-Coronavirus levels so it remains to be seen how these businesses will cope.

Should you have any queries please do not hesitate to get in touch.

For small to medium sized business there is a new loan scheme available. Eligibile businesses can apply to borrow between £2,000 and £50,000 for up to six years with no repayments in the first year. The scheme is government backed. You apply directly to the lender, the first choice for which would typically be your own business bank.

Government information on bounce back loan scheme.

Bounce back loan information from The British Business bank.

From 4 May HMRC will be contacting self-employed people who are eligible for the Self-Employment Income Support Scheme (SEISS).

There is a checker so you can see if you are flagged as entitled to this – you will need your Unique Tax Reference (UTR) and National Insurance number.

If you don’t already have a Government Gateway account you should create one now.

https://www.gov.uk/government/news/self-employed-invited-to-get-ready-to-make-their-claims-for-coronavirus-covid-19-support

As part of our planning for a possible complete lockdown due to Coronavirus we have been reviewing the jobs due in the next few months in order to minimise delays and disruption.

We have been able to complete all March payrolls meaning that we have several weeks before four-weekly and monthly payrolls will again be due.

The situation has highlighted the fact that a small number of clients are still paying their staff weekly and incurring extra costs as a result.

In an effort to reduce both our workload and your costs in this period of uncertainty we are writing to suggest that you consider changing to four weekly or monthly pay.

Monthly payments are best when the recipients are paid the same amount each month, ie salaried.  Where staff hours vary, for example they complete a timeheet and are paid for the hours worked each week, then four weekly is easier.

We realise, of course, that there can be resistance to this change from employees used to managing their money from week to week.  In order to make the change employees must give their explicit consent.

Incentives can be given to encourage them to accept the change.  A one-off bonus or a % pay rise for example, which would be covered by your saving in our fees.  Additionally/alternatively you could make the change gradually, with a month or two where staff are paid fortnightly before moving to four weekly or monthly.

Should you decide to make this change we estimate a 30% reduction in your payroll bills over the course of the year.  Clearly this cannot be guaranteed as starters and leavers and possibly dealing with any government financing due to Coronavirus may lead to additional work but this would be the reduction in cost of the basic payroll package.

We would suggest that you consider the above and discuss the matter with your employees.  If you require more information please get in touch.

Well, we are certainly living in strange times.  This is the third time we have written to explain what we are doing.

I will endeavour to keep this blog up to date but am also posting on our Facebook site which is somewhat quicker to do.

In due course both will be updated with details of the grants, loans and other help which is going to be available to our clients.

Victoria

 

 

24 March 2020

Dear Client

With the ever changing situation surrounding the Coronavirus we continue to revisit our planning.

Due to the efficiencies of both ourselves and our clients we anticipate very few accounts or tax returns will be affected in the short term.  Additionally, we fully expect that the relevant authorities (HMRC and Companies House) will be relaxing the usual deadline and penalty regimes.

We will keep our website (blog) and Facebook page updated.

At present we are operating on a skeleton staff on the basis that certain workers in the financial sector are “key workers” eg, those involved in the processing of employee wages.  We intend to maintain a restricted presence sufficient for us to keep this important function operating.  This will also enable us to keep clients  advised of the various government assistance programmes as and when the details become available.

Our landlords, ELDC, have withdrawn all of their support staff (ie switchboard and reception) so there is absolutely no client access to our offices.  The telephones are diverted to Steve Clark.

In the event of a complete lockdown meaning we are unable to access the offices the main issue is going to surround the processing of client payrolls (and dividends where applicable). Due to the highly confidential nature of much of the data involved in payroll processing this is not something that can safely be dealt with by working from home – the GDPR implications are too significant.

The other area which could be impacted will be the submission of VAT returns and we will be contacting the relevant clients on an individual basis as necessary. All the VAT returns with which we assist are currently fully up to date with the next batch being those for the quarter ended 31 March. Hopefully the situation will become clearer before those are due for submission.

We will, of course, provide as much notice of any complete closure as we can and will be happy to answer any questions you may have in the meantime.

Only two emails are now monitored on a regular basis, those for Victoria and Steve.

Please send all emails to both addresses as this will assist in our response being as efficient as possible.  If emailing Denise in regard to wages queries we would suggest you send the email to all three addresses.