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The UK government’s Statutory Sick Pay Rebate Scheme continues to provide financial support to small and medium-sized employers.
If you’re an employer with fewer than 250 employees, and if you’ve paid Statutory Sick Pay (SSP) to employees for coronavirus-related sickness absence, you could be eligible for support.
The repayment will cover up to 2 weeks of the applicable rate of SSP. Find out more information on eligibility and check if you can claim back statutory sick pay.
Your employees may incur additional household costs if they have to work at home on a regular basis, either for all or part of the week. This includes having been told to work from home because of coronavirus.
Additional costs include things like heating, metered water bills or business calls, that they can demonstrate have been incurred wholly, exclusively and necessarily as a direct result of working from home. They do not include costs that would stay the same whether they are working at home or in an office.
If you, as their employer, don’t already reimburse your employees for these costs, they may be eligible to claim tax relief on them. They can claim quickly and simply using our online service, which is now open for claims that relate to periods up to 5 April 2022.
Employees who have to complete a Self Assessment tax return will need to claim working from home expenses via the employment income pages of their tax return instead of the digital service.
Insolvency measures supporting businesses during the pandemic and helping them recover will be extended till the end of September 2021. These were due to end by the end of June 2021.
The measures, which were originally introduced in the Corporate Insolvency and Governance Act in March 2020, included protecting businesses from aggressive creditor enforcement and removing personal liability on company directors.
Businesses that have had to remain closed during the pandemic and are unable to pay rent on their commercial property will continue to be protected from eviction. The current moratorium to protect tenants from eviction will be extended by nine months to 25 March 2022.
The government-backed recovery loan scheme, launched on 6 April 2021, provides additional finance to businesses that require it. The scheme only runs until 31 December 2021 and will be administered by the British Business Bank. Loans will be available through a diverse network of more than 20 accredited commercial lenders.
The government will provide an 80% guarantee for loans of up to £10m per business with interest capped at 14.99%. it is understood that in the vast majority of cases actual rates are expected to be much lower.
There are three Pay As You Grow options to consider:
- Request an extension of the loan term to 10 years from six years, at the same fixed interest rate of 2.5%
- Reduce the monthly repayments for six months by paying interest only. This option is available up to three times during the term of the Bounce Back Loan
- Take a repayment holiday for up to six months. This option is available once during the term of the Bounce Back Loan
These options can be used individually or in combination with each other. If you have taken out a Bounce Back Loan, your lender will communicate PAYG options three months before your repayments begin, as well as outlining how your payment profile may change according to your PAYG choices.
HMRC has released preliminary guidance on the availability of the fifth taxable SEISS grant, which will cover the period May 2021 to September 2021.
To be eligible, similar rules as the previous grants will apply, including:
- trading in 2019-20 (and a return for that year submitted by 2 March 2021)
- trading in 2020-21.
Further, individuals must either:
- be currently trading but impacted by reduced demand due to coronavirus
- have been trading but are temporarily unable to do so due to coronavirus.
Trading profits must be no more than £50,000 and at least equal to non-trading income. HMRC will initially base this assessment on 2019-20 tax returns but if an individual does not qualify on that return, HMRC will look at earlier tax years from 2016-17 to 2018-19 and 2019-20.
Upon claiming individuals must declare that:
- they intend to continue to trade
- they reasonably believe there will be a significant reduction in their trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus from May 2021 to September 2021.
HMRC will expect individuals to have made an honest assessment about whether they reasonably believe their business will have a significant reduction in profits.
Unlike the earlier SEISS grants, the amount of the fifth grant will be determined by reduction in turnover in the tax year 2020-21. The turnover-based grant will be paid in a single instalment and assessed as follows:
Basis of calculation
30% or more
80% of 3 months’ average trading profits
Less than 30%
30% of 3 months’ average trading profits
The online claims service for the fifth grant will be available from late July 2021.
HMRC will only accept claims beyond the relevant deadline if a firm has a reasonable excuse for missing that deadline.
What might be considered a ‘reasonable excuse’ for a delayed claim?
- the death of a partner or close relative shortly before the claim deadline
- an unexpected hospital stay
- a life-threatening or severe illness and including coronavirus-related sickness that prevents the claimant from claiming in time (will only apply if no one else in the company could reasonably file the claim)
- a period of self-isolation that prevented a claim being made (only applies if no one else could reasonably make the claim)
- computer or software failure just before, or while preparing, an online claim
- issues with HMRC online services or HMRC errors
- fire, flood or theft
- unexpected postal delays
- delays relating to a disability that prevented a claim from being made.
From 1 July, the level of the grant will be reduced, but employers will be obliged to top up employees’ wages to 80% of their normal salary.
From 1 July, CJRS covers 70% of an employee’s wages (cap: £2,187.50) and employers will pay NICs and pension contributions and must cover the 10% not covered by the scheme.
From 1 August until the end of September, CJRS covers 60% of an employee’s wages (cap: £1,875) and employers will pay NICs and pension contributions and must cover the 20% not covered by the scheme.
You can continue to choose to top up your employees’ wages above the 80% total and £2,500 cap for the hours not worked at your own expense.
Can I force employees to come back to work?
There is no obligation on the employer to keep employees on furlough and so if they refuse to go to work when asked, the logical conclusion is that they do not have any entitlement to be paid. Under employment law, workers can refuse to come into work if they believe they will face ‘serious and imminent’ danger although it is unclear whether the risk of catching coronavirus would fall under this umbrella.
What if one of my workers is clinically vulnerable?
Shielding is currently paused. Although the advice to shield has ended, clinically extremely vulnerable people must continue to follow the rules that are in place for everyone. Regular reviews of the risk assessment should be carried out to make sure you are doing all as ‘reasonably practical’ to keep them from harm.
Sensible employers will take into account specific vulnerabilities when deciding which employee should come back from furlough first.
Can I make my workers redundant?
Yes, you can, but employees still maintain their rights on redundancy. This means they could still be entitled to:
If an employee worked for you for two years or more, they are entitled to redundancy pay. This two-year period includes any period spent furloughed. Redundancy pay is calculated using the amount of salary pre-furlough.
You must give your employee notice before being made redundant as long as they have worked for you for one month. This will either be statutory notice (one week’s pay for each year of continuous employment) or contractual (the amount given on top of the statutory amount).
If the employee is only entitled to the statutory notice: notice pay should be based on full salary.
If the employee’s contract gives them at least one week more than the statutory notice period: notice pay will depend on the furlough agreement between employer and employee; eg if the employee agreed to receive 80% of pay while on furlough, and they remain on furlough for the entire notice period, then the notice pay will be paid at the same rate as the furlough pay (80%).
Holiday pay (accrued annual leave)
Any holiday pay will also be given for days accrued but not taken; this must be paid at the full rate, and not 80%, even if the employee has been on furlough. Unpaid wages, however, operate differently: if the employee was on furlough but has not yet been paid, the employee is still entitled to be paid, but only at the 80%.
HMRC says that many of the 2020/21 self-assessment tax returns it’s received either include entries for SEISS payments that don’t match the figures it has on record or show nothing at all. As a result, it’s automatically amending those returns and sending out corrected tax calculations.
You should of course check HMRC’s amended figures to make sure they reflect only the total of the first, second or third SEISS grants you received on or before 5 April 2021. But that’s not all. You should also check that you reported the SEISS payments in the right box on your tax return. HMRC’s latest guidance tells you where the payments should be shown.
If you put the figures in the wrong place HMRC will assume you haven’t declared the payments at all. It will automatically add them which will result in you being taxed twice on the SEISS payments. To avoid this double taxation, you must submit an amended tax return reporting the SEISS figures in the right place and removing them from the part of the tax return where you originally included them.
Since last March, the government has paid 80% of the salaries of employees (up to a maximum government contribution of £2,500 per month) – with the employers only having to pay employer National Insurance and pension contributions.
From 1 July the government will only pay 70% of the furloughed employee’s salary, so the employer has to pay 10% of the salary themselves. In August and September, employers will have to pay 20%, with the government picking up 60%. Furloughed employees will continue to receive 80% of their wages including the employer contribution.
Further details of changes to the CJRS can be found at GOV.UK CJRS.
Universal Credit (UC) is replacing the old tax credits system. However, tax credits are still applicable to existing claimants.
Where an individual or couple is in receipt of Working Tax Credits and/or Child Tax Credits, they will be unaffected by the UC rollout until they:
- choose to make a claim for UC
- need to claim another benefit that UC has replaced, such as housing benefit; or
- have a change of circumstances that ends the tax credits claim and they need to make a new claim for support.
Until then, the old system of claiming and renewing needs to be followed. In some cases, the renewal will be automatic and the claimant will simply receive a renewal notification. But some claimants need to complete a renewal pack, which is sent out in June each year. In a 1 July press release HMRC stated that just under 500,000 forms were outstanding, and emphasised that these must be completed by 31 July in order to continue receiving payments.
Any changes in circumstances must be reported. However, the press release confirmed that employed claimants do not need to report any temporary falls in their working hours as a result of coronavirus. They will be treated as if they are working their normal hours for up to eight weeks after the furlough scheme closes. Grant payments received under the Self-Employment Income Support Scheme do need to be reported though.
HMRC has released details of the fifth instalment of the SEISS. It hasn’t given a specific date when its online claims portal will open, but its guidance issued today says it will be available from late July 2021.
Nevertheless, there are steps you can take so that you’re ready to make a claim as soon as the online service is available.
- If you haven’t done so already work out your turnover for the twelve-month period starting on any date between 1 April 2020 and 6 April 2020.
- Check your records and find your turnover from either 2019/20 or 2018/19. This will be needed as a reference year.
If you started self-employment or became a business partner in 2019/20, and you hadn’t traded previously at any time between 6 April 2016 and 5 April 2019, you won’t need to follow steps 1 or 2 to make a claim.
HMRC’s guidance stresses the importance of making the claim yourself. It says that if your accountant or anyone else makes the claim on your behalf it will trigger a fraud alert.
If you’re bringing back your employees part time, you can claim furlough flexibly for them under the Coronavirus Job Retention Scheme (CJRS).
If you haven’t submitted your June furlough claims yet, you must do so by the deadline of Wednesday 14 July.
You can now also claim for pay periods in July.
To help you plan ahead for future claim periods, the CJRS calculator is available to help you work out how much you can claim for employees up to the end of September.
For the latest information, join HMRC live webinar. You can ask questions throughout using the on-screen text box.
Coronavirus Job Retention Scheme webinar
HMRC will look at:
- who can claim
- who you can claim for
- how to calculate what you can claim
- how to claim
- bringing your employees back from furlough.
There are useful handouts for you to download and HMRC will also send you a link to a recording after the live webinar.
If you’re a small or medium-sized employer with fewer than 250 employees, you may also be eligible for the Coronavirus (COVID-19) Statutory Sick Pay Rebate Scheme.
View HMRC recorded webinar about the Statutory Sick Pay Rebate Scheme on HMRC’s YouTube channel, for further guidance on the scheme, including who you can claim for, how to claim and what you may be entitled to.