Update on Government schemes in response to COVID-19
We are now well into the lockdown and we hope that you are keeping safe and well. Here, at Banner & Associates we are adjusting to working from home and although there are some differences to the way we service our clients. Remember if you want a phone call then please email the relevant person to arrange a time for a call.
I have outlined below some updates to the schemes that the Government has announced in relation to COVID-19.
Stay safe and best wishes to all.
Companies House 3-month extension to filing of accounts
You can get a 3-month extension to the filing date for your accounts from Companies House. The application for this extension must be done prior to the due date for the accounts.
This application can be done online using this link, https://www.gov.uk/guidance/apply-for-more-time-to-file-your-companys-accounts
If you do request an extension to the filing date for your accounts, please let us know. Remember this is just an extension and the accounts will still be due at some point.
Time to pay arrangement for COVID-19
The HMRC phone number for arranging a time to pay arrangement has now changed to 0800 024 1222. This should be phoned if you want an extension to corporation tax or PAYE/NI.
Please note that VAT payments are automatically deferred to 31 March 2021.
Self-assessment due on 31 July 2020 has also been automatically been moved to 31 January 2021. This would mean that on 31 January 2021 you will be paying not only the second payment on account that would have been paid on 31 July 2020 but also the tax due for the tax year ended 5 April 2020 and the first payment on account for the 2020/21 tax year. Although the payments on account can be reduced to £nil there are potential consequences of doing this being interest and a requirement to pay the 2020/21 tax bill early.
If you are a Director of a limited company then you do not qualify for the Coronavirus Self-employed Support Scheme you in fact qualify for the Job Retention Scheme.
Also, there are some scammers out there pretending to be HMRC and contacting individuals saying that they qualify for the Coronavirus Self-employed Support Scheme. If you receive a call from HMRC asking for personal information, then hang up immediately!
Job Retention Scheme
There is a lot more information now on the Job Retention Scheme and I am going to go through it all below. Please note that the HMRC portal through which this can be claimed is still under development and is expected to be completed by 20 April 2020. Thereafter the grants will be paid and the timing of when the grants will be paid is still unclear at this time.
- Employees and Directors can be put on furlough rather than being made redundant. This is available to Directors of Personal Service Companies too, but it is only for your salary NOT dividend.
- While on furlough the employees must do no work at all! Furlough in this instance is an alternative to redundancy and means a leave of absence from work.
- Directors are permitted to carry out statutory duties only but not allowed to work or even look for work. Training is permitted though.
- There is a minimum furlough period of three weeks and currently a maximum of three months, though this could change. Employers can apply furlough for any period within these parameters.
- Furlough pay granted by Government is 80% of the normal pay as at 28 February 2020.
- Employees must be on the payroll at 28 February for furlough pay to be available.
- The maximum amount of furlough pay is £2,500. Employer NIC and mandatory Auto enrolment contributions will be paid in addition. Please note that for most of our clients no Employer NIC or Auto-enrolment apply. This is because if you have more than one employee then we will be claiming the Employment allowance. Auto-enrolment is not mandatory for Directors.
- Claims will be made through a special portal, which is expected to be available by 20 April 2020.
- If we are your agent with HMRC for PAYE then we will be able to do this on your behalf. In some instances, we may not be your agent and in which case you as the Employer will have to make the application yourself as this would be quicker than us becoming your agent and then doing the application.
- The payments will be taxable on the Employer.
- Being furlough does not exclude you from continuing to take dividend and you are not excluded from it if you are in receipt of rental income.
- This is a government grant and not a loan so will not need to re-paid. However, HMRC retains the right to retrospectively audit all claims.
Another point to note that as for most of our clients the monthly salary is equal to the personal allowance, it would make sense that we would continue processing the monthly salary at this amount and then if you are ‘furlough’ we can claim a grant for 80% of this and your company pays you the remaining 20%.
If you are going to be ‘furlough’ it is necessary, that you can demonstrate this and that there is a letter in place confirming your status as being furlough and the same for any other employees. I did a search on google and there are many free furlough templates available. This is essential as per my last point HMRC retains the right to audit claims retrospectively.
Please email Ron at [email protected] if you are going to furlough and from when you wish to claim the Job Retention Scheme grant (1 March 2020 or later) and if for all employees or just you as the Director. Also please ensure you have the evidence of the furlough letter and something to confirm that you are not working. You do not need to send this to us but you must have it in place.
As always, we will help you with the applications and make them on behalf of clients where we are your agent. Please note this is additional work to our usual workload and we will get it done for you but we ask for your patience and understanding. These are unprecedented times that are unimaginable. We are all working hard from home and some of our staff have been sick with suspected COVID-19 including myself. Please be patient we are all in this together!