Business News
COVID-19 support hits HMRC service levels
The diversion of resources to deliver the government’s coronavirus support schemes had a significant impact on HMRC’s service performance in Q2, with call waiting times reaching close to 12 minutes.
HMRC’s service performance data for April to June 2020 reveals the average speed of answering calls increased to almost 12 minutes, double the time taken in January to March 2020 and well in excess of the target of five minutes. Almost half (47%) of callers waited more than 10 minutes before they spoke to an adviser.
The measures that HMRC needed to take included reducing operating hours and re-deploying advisers to new helplines for the support measures. Helpline hours continue to be reduced, but ICAEW’s Tax Faculty understands that HMRC hopes to extend the hours within the next couple of months (although not immediately to their previous level).
HMRC’s telephone system was not set up to allow advisers to answer calls to the main helplines from home. HMRC is testing allowing advisers to answer calls from home, but it is not a straightforward exercise. HMRC is encouraging the use of webchat as that can be handled by advisers based at home.
As ICAEW members in practice have reported, the agent dedicated line was also affected, with waiting times of 17 minutes in April, 28 minutes in May and 11 minutes in June.
Perhaps surprisingly, the number of call attempts to HMRC helplines (8.7m) was down significantly on the equivalent quarter in 2019 (12.3m).
Post handling performance held up better, with HMRC’s system for scanning post and allocating it electronically resulting in 84% of post being cleared with 15 working days of receipt.
This performance needs to be seen in the context of unprecedented and unforeseeable circumstances and HMRC has published a narrative alongside the data to provide that context. This highlights the development and implementation of the Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme alongside more than 60 other provisional policy changes and easements to help respond to the impact of the pandemic.
3 September: ICAEW Know-How from the Tax Faculty
If you want to claim the second grant you must make your claim on or before 19 October 2020.
Claims for the first grant are now closed.
You must make the claim yourself. You must not ask a tax agent or adviser to claim on your behalf as this will trigger a fraud alert, which will delay your payment.
You’ll have to confirm to HMRC that your business has been adversely affected due to coronavirus.
Click HERE for more info.
Millions of self employed to benefit from second stage of support scheme
Millions of self-employed people whose livelihoods have been affected by coronavirus will be able to claim a second payment of up to £6,570 as of 17th August 2020.
Published 17 August 2020
From:
second stage of Self Employment Income Support Scheme (SEISS) opened for applications 17th August 2020.
those eligible will receive a government grant worth up to £6,570
Those eligible will now be able to receive a second and final grant worth 70% of their average monthly trading profits, with the money set to land in their bank accounts within six working days of making a claim.
Anyone whose self-employed business has been adversely affected by coronavirus since 14 July is eligible for the scheme.
Chancellor of the Exchequer Rishi Sunak said:
Our self employment income support scheme has already helped millions of hard working people, whose get up and go drive is crucial to our economy. It means that people’s livelihoods across the country will remain protected as we continue our economic recovery - helping them get back on their feet as we return to normal.
HMRC will contact all potentially eligible customers to advise them that they can claim for a second and final SEISS grant.
The eligibility criteria remains the same as for the first grant, with people needing to have had trading profits of no more than £50,000, making up at least half of their total income.
The SEISS is part of a package of support for self-employed people, including Bounce Back loans, income tax deferrals, rental support, increased levels of Universal Credit, mortgage holidays and the various business support schemes the government has introduced to protect businesses during this time.
The Chancellor has also set out the government’s Plan for Jobs to support, protect and create jobs up and down the country- including in the construction and housing sectors through funding to decarbonise public sector buildings and our Green Homes Grant.
Further information
Guidance on how the grant works can be found here.
Eligible customers will be informed that they will be able to make their claim for the second and final grant at any time from a specified date, until the scheme closes on 19 October 2020.
VAT: Holiday payment window snaps shut
Businesses need to pay VAT on the normal due dates from 1 July. Neil Warren discusses how advisers can assist clients who will struggle to pay HMRC on time.
19th Jun 2020
The VAT payment holiday window ends on 30 June, and normal service resumes from 1 July. The good news is that a sympathetic ear and time to pay agreement may be available from HMRC.
Payment Support Service (PSS)
The priority is to contact the PSS at HMRC before the VAT is legally due for payment. Any time to pay agreement won’t then be subject to a default surcharge. Before you call the PSS, make sure you have the VAT number and bank account details to hand. Also be clear about the amount of VAT that is outstanding and your proposals to settle the arrears.
The HMRC officer you speak to will also require details about why you cannot pay on time. A partial payment on time will score brownie points, rather than asking for all of the liability to be deferred.
Contact details for the PSS: 0300-200-3835, open 8am to 4pm Monday to Friday.
Example
ABC Clothing has been selling goods online since the Covid-19 lockdown started and owes £12,000 on its May 2020 VAT return. However, the company has had to spend £9,000 on its shop premises to comply with social distancing and arrange screens for cashiers, before its shop reopened for business on 15 June. This was an unexpected bill due to the virus.
The company has asked if it can pay £3,000 of the VAT on time, with the balance paid at the end of August and September in equal instalments of £4,500 each. The proposal is likely to be accepted by HMRC in the current climate.
More time
It is tempting for clients to ask advisers: “What is the maximum time HMRC will let me have to pay?” This is the wrong approach; the client needs to establish how much he can afford to pay and when, then justify that time period to HMRC. There is no fixed “going rate” period that HMRC allows.
Reasonable excuse
The concept of reasonable excuse has always been a key part of the VAT system. It has been the subject of many tribunal hearings over the years because it is not clearly defined in law. In the VAT world, it is relevant when a business has missed a deadline, eg filing a return, registering for VAT on time, paying tax or replying to an information notice.
The HMRC guidance on reasonable excuse now includes a paragraph that is specific to the impact of the virus: “HMRC will consider coronavirus as a reasonable excuse for missing some tax obligations (such as payments or filing dates). Explain how you were affected by coronavirus in your appeal. You must still make the return or payment as soon as you can”.
Extra three months to appeal
More good news is that taxpayers notified of any HMRC decision that is dated February 2020 or later will be given an extra three months to appeal the decision if they think it is wrong.
For example, an officer’s VAT assessment raised on 31 March and subject to a 30-day appeal deadline, must be appealed by 31 July rather than by 30 April. This appeal extension recognises that many businesses might not have been able to appeal while key staff was working remotely.
Cashflow
If any of your clients have taken advantage of the VAT holiday payment window, and pay their dues by direct debit, don’t forget that they must reactivate the direct debit mandate with their bank after 30 June. Any cashflow projections need to include the 31 March 2021 deadline for settling the VAT deferred during the payment holiday window.
HMRC seeks powers to investigate furlough fraud
17 Jun 2020 By Francis Churchill
Employers urged to ‘check and double check’ claims, as bill being fast tracked through parliament proposes giving firms 30 days to admit errors
Employers that think they may have accidentally misused the furlough scheme could be given a 30-day amnesty to admit their mistake under a draft bill to tackle furlough fraud, which is currently being fast tracked through parliament.
The draft legislation will give HMRC the power to check grants made to employees through the job retention scheme have been used correctly to pay workers’ wages, and to ensure employers have not been overpaid furlough reimbursement.
It would allow HMRC to reclaim through income tax assessments any furlough money overpaid to employers or not spent on wages as intended. And any organisation caught deliberately using furlough money for anything other than its intended purpose – so-called furlough fraud – would face a financial penalty.
‘Furlough fraud’ claims on the rise, says whistleblowing charity
Job retention scheme set to cost a third less than predicted, says watchdog
New-look job retention scheme – what’s the detail now it’s been announced?
“The penalty will only apply if the person fails to notify HMRC about the situation within 30 days,” the draft bill said.
The bill would give HMRC the same powers to vet and reclaim payments made to self-employed individuals through the self-employed income support scheme.
The legislation, which is part of the finance bill 2020, could be passed as early as July.
Dawn Register, partner in tax dispute resolution at BDO, said the bill was a sign that the government was “gearing up to tackle incorrect and fraudulent claims” made through the various coronavirus support schemes.
“For those where HMRC suspects fraud, we can expect serious investigations,” Register said, noting that the draft legislation included powers to pursue company office holders where businesses became insolvent. She also expected HMRC to start following up on whistleblowing claims of furlough fraud, which appeared to be on the rise.
The government said it had received 1,868 such reports as of the end of May – more than double the 795 reports received by the middle of the month – and independent whistleblowing organisations have also warned of an increase in calls relating to furlough fraud.
Charity Protect said last month that 36 per cent of coronavirus-related calls taken by its advice line since the start of the pandemic had involved employers fraudulently taking advantage of the government scheme, either by forcing staff to continue working despite paying them through the furlough scheme, or by claiming furlough funding for staff without their knowledge while they were still being asked to work.
Not all misspent furlough money will have been a case of deliberate abuse, however, said Register. “For business owners, many of whom may have implemented claims in a rush at the start of lockdown, now is the time to check and double check the amounts are right,” she said. “Making sure the paperwork is accurate and government guidelines are adhered to is key.”
As of June, 9.1 million jobs had been furloughed under the job retention scheme, at a cost to the taxpayer of £20.8bn. Another 2.6 million claims had been made through the self-employed income support scheme, at a cost of £7.6bn.
Free short-term courses to improve skills
If you’ve been impacted by coronavirus (COVID-19), a range of free, fully-accredited courses are now available to help you retrain and improve your skills.
Skills
The Department for the Economy is supporting up to 2,000 free places on short courses, delivered by the local further and higher education providers.
Opportunities are available from entry to postgraduate levels, focusing on skills identified by industry, including:
digital skills
essential skills
employability skills
leadership and management
A range of courses to help you get work in the health and social care sector, to meet its current demands in this public health emergency, are also available.
All courses will be delivered online and how you take part will be flexible to fit around your busy lives, whether you’re working from home or providing support to children or vulnerable relatives.
All courses include an accredited qualification and will finish by 30 November 2020.
Courses available
Find out what courses are available at your local college or education provider below. For more information on specific courses, visit the provider’s website.
Belfast Metropolitan College
ILM level 3 award: leadership and management
ILM level 3 accredited module: understanding stress management in the workplace
ILM level 3 accredited module: solving problems and making decisions
OCN level 3 award: digital construction with building information modelling
level 2 OCN award: social media
level 2 OCN award: digital marketing
CIM level 4: digital marketing module
Cisco cyber security essentials
MTA security fundamentals
analysing and visualising data with Microsoft Power BI
level 2 Highfield award: food safety for catering
level 3 Highfield award: food safety for catering
level 2 NCFE CACHE award: health and social care
level 4 ILM certificate: principles of leadership and management for adult social care
Level 2 CACHE introductory awareness of autistic spectrum disorders
Level 2 OCN award: meeting needs of learners with ADHD
Level 2 CACHE certificate: managing challenging behaviour in children and young people
Level 2 CACHE: understanding children and young people’s mental health
CPD non-accredited safeguarding
CPD suicide awareness
CPD addiction
Northern Regional College
City and Guilds level 1 certificate in Essential Skills: Information and Communication Technology
City and Guilds level 2 certificate in Essential Skills: Information and Communication Technology
OCN NI level 2 award: social media
OCN NI level 2 award: employability skills
OCN NI level 2 award: digital marketing
OCN NI level 2 award: understanding protection and safeguarding
CMI level 3 award principles in management and leadership: managing a team to achieve results
CMI level 3 award principles in management and leadership: managing volunteers (COVID-19 response)
CMI level 6 award professional management and leadership practice: innovation and change
South West College
ILM level 2 award: leadership and team skills
ILM level 5 certificate: leadership and management
ILM level 4 certificate: project management skills
ILM level 3 award: leadership and management
OCN NI level 1 award: the fundamentals of health care
OCN NI level 1 award: foundation skills in working with children
RSPH level 1 award: food hygiene awareness
OCN NI level 2 award: end of life care
Highfield level 2 award: understanding infection prevention and control in health and care settings (RQF)
RSPH level 2 award: food safety and hygiene
entry level introductory award: employability skills
OCN NI level 1 award: employability skills
OCN NI level 1 award: personal career development qualification
OCN NI level 2 award: employability skills
OCN NI level 3 award: employability and professional development skills
NOCN entry level award: mathematics skills (entry 3)
NOCN entry level award: English skills (entry 3)
OCN NI entry level award: using ICT systems (entry 3)
OCN NI entry level award: ICT skills (entry 3)
OCN NI level 1 award: social media qualification
OCN NI level 2 award: social media qualification
OCN NI level 2 award: information technology applications
ProQual level 2 award: cyber security awareness for business
North West Regional College
INSPIRE employability
transversal skills
management through change
managing furlough and new contracts (HR)
project management
motivating and leading a team through COVID-19
programming/ coding for beginners
IT and office skills
using Word Press or web platform for website (programming)
introduction to social media for marketing
Photoshop - using imaging software tools
introduction to cyber security
numeracy (maths)
communication (English)
ICT
dementia awareness
autism
introduction to health and social care
pre-domiciliary care
safeguarding DSO
first aid (refresher for COVID-19)
contact dermatitis
South Eastern Regional College
City and Guilds ITQ for users: level 2 award
ILM level 3: leadership and management with an employability and careers wrap around (skills intervention programme)
CMI Level 5: leadership and management
CMI level 3: project management with an employability and careers wrap around (skills intervention programme)
health and social care (skills intervention programme)
Queen’s University Belfast
postgraduate certificate: operations and supply chain management
Ulster University
postgraduate certificate: professional software development (data science)
postgraduate certificate: artificial intelligence
flexible qualifications computer aided design and manufacture for the engineering sector
postgraduate certificate in business analysis and consulting
postgraduate certificate in professional development (enabling business recovery)
Further information
For more information on any of the courses above and how to apply, contact the relevant college or university:
Other online training courses can be found at online training support.
This guidance page was updated on 12 June to include details on how the scheme will change from 1 July.
The first time you will be able to make claims for days in July will be 1 July, you cannot claim for periods in July before this point.
31 July is the last day that you can submit claims for periods ending on or before 30 June.
The Coronavirus Job Retention Scheme will close on 31 October 2020.
From 1 July, employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS grant for the hours not worked.
From 1 August 2020, the level of grant will be reduced each month.To be eligible for the grant employers must pay furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they are being furloughed.
The timetable for changes to the scheme is set out below. Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours:
There are no changes to grant levels in June.
For June and July, the government will pay 80% of wages up to a cap of £2,500 for the hours the employee is on furlough, as well as employer National Insurance Contributions (ER NICS) and pension contributions for the hours the employee is on furlough. Employers will have to pay employees for the hours they work.
For August, the government will pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough and employers will pay ER NICs and pension contributions for the hours the employee is on furlough.
For September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
For October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
Employers will continue to able to choose to top up employee wages above the 80% total and £2,500 cap for the hours not worked at their own expense if they wish. Employers will have to pay their employees for the hours worked.
The table shows Government contribution, required employer contribution and amount employee receives where the employee is furloughed 100% of the time.
Wage caps are proportional to the house not worked.
The Chancellor set out more details on how the Coronavirus Job Retention Scheme (CJRS) will continue to support jobs and business as people return to work, following the announcement of an extension of the scheme on 12 May.
From 1 July 2020, businesses will be given the flexibility to bring furloughed employees back part time. This is a month earlier than previously announced to help support people back to work. Individual firms will decide the hours and shift patterns their employees will work on their return, so that they can decide on the best approach for them - and will be responsible for paying their wages while in work.
From August 2020, the level of government grant provided through the job retention scheme will be slowly tapered to reflect that people will be returning to work. That means that for June and July the government will continue to pay 80% of people’s salaries. In the following months, businesses will be asked to contribute a modest share, but crucially individuals will continue to receive that 80% of salary covering the time they are unable to work.
The scheme updates mean that the following will apply for the period people are furloughed:
June and July: The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything.
August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.
September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.
October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.
Chancellor Rishi Sunak said:
Our top priority has always been to support people, protect jobs and businesses through this crisis. The furlough and self-employment schemes have been a lifeline for millions of people and businesses.
We stood behind Britain’s businesses and workers as we came into this crisis and we stand behind them as we come through the other side.
Now, as we begin to re-open our country and kickstart our economy, these schemes will adjust to ensure those who are able to work can do so, while remaining amongst the most generous in the world.
Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked. Employees who believe they are not getting their 80% share can also report any concerns to the HMRC fraud hotline. HMRC will not hesitate to take action against those found to be abusing the scheme.
DEADLINE for 1st Round of SEISS - 13/07/20
Claim a grant through the Self-Employment Income Support Scheme
If you're self-employed or a member of a partnership and have been adversely affected by coronavirus (COVID-19) you can use this scheme if you're eligible to claim the grant.
From: HM Revenue & Customs
Contents
Use this online service to:
check if you’re eligible
make your claim
If you’re eligible and want to claim the first grant you must make your claim on or before 13 July 2020.
This scheme is being extended. You’ll be able to make a claim for a second and final grant in August 2020. Find out more about the extension to the scheme.
What you’ll need
You’ll need your:
Self Assessment Unique Taxpayer Reference (UTR) – if you do not have this find out how to get your lost UTR
National Insurance number – if you do not have this find out how to get your lost National Insurance number
Government Gateway user ID and password – if you do not have a user ID, you can create one when you make your claim
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
How to claim
You must make the claim yourself. Your tax agent or adviser must not claim on your behalf as this will trigger a fraud alert, and you will have to contact HMRC. This will cause a significant delay to you receiving your payment.
You’ll have to confirm to HMRC that your business has been adversely affected by coronavirus.
You should not claim the grant if you’re a limited company or operating a trade through a trust.
Online services may be slow during busy times. Check if there are any problems with this service.
HMRC will check claims and take appropriate action to withhold or recover payments found to be dishonest or inaccurate. If we need to recover a payment you may have to pay a penalty.
If you’re unable to claim online you should contact HMRC for help.
Coronavirus: Self-Employed Income Support Scheme extended
2 June 2020
Those eligible under SEISS will be able to claim a second and final grant in August
The government has announced that the Self-Employment Income Support Scheme (SEISS) will be extended. Applications for a second payment will open in August and will give eligible self-employed workers a final grant worth 70 per cent of their average monthly trading profits for June, July and August.
Applying for the first SEISS grant
Individuals can continue to apply for the first SEISS grant until 13 July. Under the first grant, eligible individuals can claim a taxable grant worth 80 per cent of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £7,500 in total. Those eligible have the money paid into their bank account within six working days of completing a claim.
Applying for the second SEISS grant
Applications for the second grant will open in August. Individuals will be able to claim a second taxable grant worth 70 per cent of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total.
Eligibility criteria
The eligibility criteria are the same for both grants, and individuals will need to confirm that their business has been adversely affected by coronavirus. An individual does not need to have claimed the first grant to receive the second grant. For example, they may only have been adversely affected by COVID-19 in this later phase.
Further guidance on the second grant will be published on Friday 12 June. In the meantime, you can find more information on SEISS below:
Coronavirus: NI Micro-business Hardship Fund
15 May 2020
The NI Executive has launched a new NI Micro-business Hardship Fund to help Northern Ireland based micro-businesses and social enterprises unable to access other regional and national COVID-19 support measures.
Department for the Economy (DfE) will make £40 million available through a fund, which is being administered by Invest NI on behalf of the Department for the Economy. It will offer emergency funding to businesses facing immediate cash flow difficulties due to the impact of COVID-19.
Summary of the scheme
The Minister for the Economy announced on 15 May 2020 that the scheme would open for online applications within the next seven days. An online eligibility checker will be available week commencing 18 May 2020.
Only one grant will be paid to each eligible business, irrespective of how many properties the business occupies.
Eligibility
Who is eligible
You can apply for the grant if:
Your business is based in Northern Ireland.
At 29 February 2020, your business employed between one and nine staff (excluding the business owner) paid via PAYE. The number of employees will be based on headcount.
Since 1 March 2020, your business experienced a reduction in turnover in excess of 40% as a direct result of the COVID-19 pandemic or associated Government restrictions.
You are a social enterprise without charitable status and receive at least 60% of your turnover from trade in goods and/or services.
Your business is associated with the processing, marketing and retail of agricultural products.
Who cannot apply
The following are not eligible to apply for the grant:
Businesses where the sole employee is the business owner or company director.
Businesses is eligible for the following NI Executive schemes:
A primary agricultural producer, which is primarily concerned with crop or animal production or forestry or logging or fisheries or aquaculture.
Charities or social enterprises with charitable status.
Social enterprises, who receive less than 60% of income through trade in goods and/or services.
Other non-repayable Government grants related to COVID-19 will be taken into account and will be deducted, where applicable, from the final grant awarded.
How you can prepare to apply
If you are eligible to apply for the grant scheme, there are some steps that you can take to prepare for completing the online application form. See get ready to apply for the NI Micro-business Hardship Fund.
Full guidance on the scheme will be available next week.
Further information - Eligibility and FAQs
Find further information in the eligibility criteria and frequently asked questions on the NI Micro-business Hardship Fund
Latest furlough and holiday pay guidance – what has it cleared up?
14 May 2020 By Siobhan Palmer
Review of new government guidelines, including on agency workers, obliging temporarily laid off staff to take annual leave and bank holidays
The government has clarified issues relating to furlough and holiday pay in guidance published on the 13th May by the Department for Business Energy and Industrial Strategy.
While it was confirmed last month that furloughed workers could take annual leave without breaking furlough, many questions remained regarding whether an employer could require staff to take holiday, and the status of temporary and agency staff was also still unclear.
While the new guidance has offered clarification on a number of questions, Peter Nicholson, associate employment law solicitor at Nelsons, pointed out that “strictly speaking, the new guidance has no legal effect”.
“Employment tribunals will not be obliged to follow it when deciding cases about holiday pay,” he explained. “However, it is very significant for employers because it goes further, and into more detail, than any previous guidance on this subject.”
So what does the latest guidance advise?
Accruing annual leave
The new guidance has confirmed that workers placed on furlough continue to accrue statutory holiday entitlements and any additional holiday provided for under their employment contract.
The guidance also confirmed that the job retention scheme does not change whether agency workers accrue holiday. In either case furlough should be treated as time between contracts, and those that do normally accrue or are able to take holiday during this period – either through the Working Time Regulations or through their contractual agreements – continue to do so. There is no new entitlement for agency workers not normally entitled to holiday entitlements between contracts.
The updated guidance was welcomed by Neil Carberry, chief executive of the Recruitment and Employment Confederation. “Hopefully [this will] remove the huge cost barrier to higher rates of furlough that many agencies faced before now,” he said.
Requiring workers to take annual leave
While previous guidance made clear that furloughed employees could take annual leave without breaking furlough, questions still remained about whether an employer could oblige workers on furlough to take holiday during this period.
The government guidelines now state employers can require staff to take annual leave while they are furloughed, subject to usual statutory notice periods. However, the guidance advised businesses to “engage with their workforce and explain reasons for wanting them to take leave before requiring them to do so.”
Alan Price, CEO at BrightHR, said while employers would be pleased to receive clarification on this issue, the new rules may not be as straightforward as they seemed. “The guidance goes on to say that employers should consider whether the aim of annual leave (rest and relaxation) is met if someone takes annual leave during furlough,” he said.
However, Kathryn Casey-Evans, head of employment and immigration at Trethowans, said it was unlikely a furloughed employee would be able to prove they were unable to take annual leave for this purpose during the crisis. “Is the impact of [lockdown] and essentially not being able to do what you want to do really not going to allow you to have that rest and relaxation?” she said. “I think that is going to be a very difficult push for an employee to be honest.”
Subsidising holiday pay with furlough funding
The guidance clarified that employers can claim through the job retention scheme for furloughed workers even while they were taking holiday. But they are required to make the difference up if the employee is entitled to higher holiday pay than their furlough pay, it said.
Nicholson said this update brought increased flexibility for employers and would allow them to ensure furloughed workers did not return to work with excessive amounts of annual leave.
It was also good news for employers that leave on furlough would be in part subsidised by the job retention scheme, he said. But he added that the new rules came with a health warning. “Employers should not see this as an opportunity to deplete furloughed employees’ holiday,” he warned. “As with everything at this exceptional time, the issue of furloughed employees’ holiday needs to be dealt with carefully and, ideally, in consultation with those concerned.”
Bank holidays
For furloughed workers who would usually take bank holidays as annual leave, the guidance sets out two options. Employees can either take the bank holiday as annual leave, and be remunerated as agreed in their employment contract, or bank holiday can be deferred if this arrangement is agreed between the employer and worker.
Carry-over holiday days
The government has passed new emergency legislation allowing workers to carry forward for two years any holiday they were unable to take this year due to the coronavirus crisis. However, Casey-Evans said this provision was unlikely to apply to furloughed workers, and was designed to help those unable to take leave due to working on the front line. “By virtue of the fact that you can take annual leave on furlough, provided the employer manages that appropriately, there's no reason why you wouldn't be able to take it [in the allotted leave year],” she said.
Price added that employers were not obliged to allow this carry-over provision. “There will be no one-size-fits-all rule when deciding whether leave can be carried over to the next two leave years, and employers may need to take an individual approach considering employees’ circumstances,” he said.
Government's scheme for self-employed does not accept driving licences issued in Northern Ireland
14 May, 2020 01:00
Concerns have been raised after it emerged that a government scheme set up to help the self-employed during the Covid-19 crisis does not accept driving licences issued in Northern Ireland.
The Self-employment Income Support Scheme was announced after the onset of the coronavirus pandemic and is run by officials at HM Revenue and Customs (HMRC).
Since the outbreak one of the hardest hit groups has been the self-employed. The scheme, which was launched yesterday, is designed to match the support being given to employees who have been furloughed. Grants will be calculated as 80 per cent of average monthly profit over a period of up to three years.
The British government has said the cash will be paid into the accounts of eligible applicants six days after applying. To be considered, applicants must fill out an online application form which includes an ID verification process. It has now emerged that the website does not accept a driving licence issued in the Northern Ireland as part of this process.
Mid Ulster SDLP MLA Patsy McGlone, below, last night said “self-employed people are disproportionately impacted by Covid-19 and have already had to wait too long to receive some support”.
“The online portal, set up by HMRC, cannot be accessed by people using an Irish passport or a Northern Ireland driving licence,” he said.
“Given the majority of people in the north hold these forms of ID, this site is clearly not fit for purpose.”
Mr McGlone has asked Economy Minister Diane Dodds what communication she has had with Chancellor Rishi Sunak on the issue.
A spokeswoman for HMRC said: “We want to reassure those in Northern Ireland that they will not be excluded from the scheme.
“Anyone can check their eligibility for the scheme using our eligibility checker, and if they meet the criteria, can apply.”
She added that existing details can be used.
“Anyone who has engaged with us online before, to file their return for example, should be able to use their existing credentials to claim online,” she said.
“Anyone going online with us for the first time can use the multiple choice questions option to attempt to verify their identity,” she said.
“If they are unable to verify, they are still able to claim their grant using our telephone helplines.”
If someone holds an local driving licence and they want to set up a Government Gateway account for the first time they can answer simple multiple choice questions to verify their identity.
If a person is unable to verify their identity a claim can still be made by calling the Covid-19 helpline on 0800 024 1222.
The Self Employment Income Support Scheme is open... Can you help us?
As Accountants and because we are not personally eligible for SEISS support we are locked out of the application process both for ourselves and for our clients.
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Self-employment grant scheme to open for applications
Last updated Wed 13 May 2020
Millions of self-employed workers will be able to apply for grants of up to £7,500 from Wednesday, with payments due to land within six days, the Government has said.
The Self-Employment Income Support Scheme (SEISS) grant is worth up to 80% of average trading profits for those stuck at home.
It is the biggest direct financial support package for freelancers and the self-employed since lockdown started, and claims for lost work can be dated back to March.
The Government has not said whether it will be extended in line with the furlough scheme protecting 80% of employees’ wages up to £2,500 a month.
Launching at 8am on Wednesday, the process will be run by HM Revenue & Customs, which has been operating and overseeing loan schemes and the Government’s furlough payments.
Everyone eligible for the SEISS will be able to receive the Government grant by May 25, or within six days of a completed claim, it added.
Chancellor Rishi Sunak said: “With payments arriving before the end of this month, the self-employed across the UK will have money in their pockets to help them through these challenging times.”
Those able to make a claim have already been contacted by HMRC and can use a unique reference to make their claim.
Derek Cribb, chief executive of IPSE (the Association of Independent Professionals and the Self-Employed), said: “For the self-employed, coronavirus is not only a health crisis, but also a pressing income crisis.
“We are delighted that the Government has heeded much of IPSE’s advice by setting up the Self-Employment Income Support Scheme, which extends a much-needed lifeline to those self-employed people who are eligible for it.”
Mike Cherry, national chairman of the Federation of Small Businesses, said: “The self-employment income support scheme represents a lifeline for the millions of self-employed people who are expected to qualify.
“I would encourage all those who think they are eligible to use the online checker if they’ve not done so yet, and to apply on the date allocated.
“We are particularly pleased to see the scheme opening earlier than scheduled, with a simple fast-track application and a promise for speedy payment.”
In an interview with the BBC, Mr Sunak was asked if he would extend the grants, and replied: “We’re looking at the best thing to do but… the reason for that is slightly different in that many of those self-employed people are not in sectors which are necessarily closed or have an employer who has reduced their hours.
“It is a slightly different scheme which I was clear about at the beginning, but what I would say to those people, millions of those people who are eligible, ahead of schedule the scheme is now open, they can apply this week, they’ll be getting the emails and they will have the same amount of support based on their historical earnings… by the end of the month.”
Mr Sunak also said the furlough scheme is “costing in the run rate of around £8 billion per month at the moment” and added it “breaks my heart” that people have lost their jobs as a result of the crisis.
HMRC says ‘missing data’ caused false SEISS checks
12th May 2020
HMRC’s eligibility checks for the Self Employed Income Support Scheme (SEISS) have been called into question after accountants and taxpayers reported a rash of false reports after the online checker was launched last week.
With claims due to be lodged from Wednesday 13 May until Saturday 16 May, accountants started flagging up the problem in Any Answers and in AccountingWEB’s coronavirus Q&A webinar on 7 May.
Nine separate practitioners logged more than a dozen false results within two days of the checker opening for business on Monday 5 May: four instances were false positives, while nine claims that should have been eligible were rejected.
AccountingWEB member SXGuy switched from self employment to a limited company last year and had some cross-over on his 2018/19 tax return. “According to the checker I’m eligible. I know I’m not since I never continued to trade as SE in 19/20,” he commented.
Other people have been reporting false positives, he continued: “I don't think it’s mainly due to late submission. Seems there's a glitch somewhere.”
The same explanation occurred to rhysharris: “There will be masses of appeals and queries.”
To add insult to the underlying frustrations from practitioners who can’t claim on behalf of their clients, Stalytax found out they were eligible and followed the link to register for a claim. “Then [I] got chucked out as I am down as a client of myself and agents cannot access this service.”
Moneybox interview
By Saturday, the issue had escalated to BBC Radio 4’s Moneybox [9:30mins into 9 May episode], which reported that it had referred “dozens” of false claim cases to HMRC.
HMRC told Paul Lewis that although it had launched the eligibility checker web page on Monday, some people had tried it out before it was fully loaded with data. Yet still the cases were coming forward, including two Moneybox listeners, Sarah and Bruce.
The department’s chief executive Jim Harra joined the programme to offer the official explanation, without adding much new information.
“The checker is ready and working for vast, vast majority of people; 2.7m people have used it to date, but here are a small number of people where we will have updated data and they should get a correct answer,” said Hanna.
“We have double-checked thousands of cases and in the vast majority of cases the checker has been correct.”
When pressed by presenter Paul Lewis on why the checker could not indicate the reasons why taxpayers were being rejected for the scheme, Hanna replied: “It hasn’t been possible to design the checker to give reasons in the time available.”
The three main qualification criteria (earning below £50,000pa; 50% of income from self-employment; and filed a self employment return for 2018-19 tax year) applied to the vast majority of eligibility rejections, Hanna said. If taxpayers or their advisers remain convinced they are eligible there is a review mechanism where the department can check the details and confirm why.
“If they do this by end of next week [16 May], we’ll get back to them before the end of the month,” he said.
AccountingWEB asked HMRC to clarify how so many anomalies were coming from the checker and other issues raised by our members, such as the number of review requests that have been submitted.
In response, the department said: “We have been updating the checker with the late filers - who were given extra time to benefit from the scheme if they missed the 31 January deadline. This represented around less than 0.2% of all people who may use the checker. By the time the service opens tomorrow they will have had all their details added.”
The Self Employed Income Support Scheme claim process will start in daily tranches from tomorrow (Wed 13 May). If you have any further questions about eligibility or how to claim, come to Wednesday’s 9am Coronavirus Q&A webinar, when Michael Auwye from Crunch and ATT’s Emma Rawson will be available to answer your SEISS questions.
Coronavirus: Furlough scheme extended until 31 October 2020
12 May 2020
The Coronavirus Job Retention Scheme will continue until 31 October 2020 with workers continuing to receive 80% of their salary up to £2,500 a month
New flexibility to the scheme will be introduced from the start of August to help support people to get back to work. From the start of August, furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff.
The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month.
More specific details and information around its implementation will be made available by the end of May. The government will explore ways through which furloughed workers who wish to do additional training or learn new skills are supported during this period.
See also Coronavirus: Claim for wages under the Coronavirus Job Retention Scheme.
Source: https://www.nibusinessinfo.co.uk/content/coronavirus-furlough-scheme-extended-until-31-october-2020
New government gateway ID process for SEISS
6 May 2020
HMRC has updated the process for obtaining a government gateway ID for the Self-employment Income Support Scheme (SEISS). ICAEW’s Tax Faculty clarifies what is needed.
In the week where HMRC starts contacting taxpayers about their eligibility for support under SEISS, it has changed the process by which IDs to access the government gateway are created to avoid delays.
Taxpayers who already have a government gateway ID which gives access to HMRC’s self assessment services will be able to use that ID when applying for their SEISS grant.
Those who do not have a government gateway ID are now prompted to create one when they use the eligibility checker, rather than at the application stage as was originally the plan.
When creating an ID through the SEISS service, the taxpayer is asked to verify their identity by providing details from their driving licence photocard or their UK passport. Taxpayers without either of these documents will be asked for a piece of financial information, for example, the date they set up a mobile phone contract.
When a government gateway ID is created as part of the SEISS service (eligibility checker or application stage) there is no requirement for an authentication code (PIN) to be sent in the post.
Taxpayers who need to create a government gateway ID to claim an SEISS grant are advised to do so through the SEISS service, rather than through any other route on gov.uk, to ensure the correct type of ID is set up and to avoid the need for an authentication code in the post.
The Tax Faculty previously advised waiting until the application stage, but now that HMRC has improved the process creating the government gateway ID at the eligibility checker stage is the preferred option to avoid delays.
Tax agents locked out of SEISS claims
The self-employed income support scheme (SEISS) will be open for applications from 13 May, but tax agents are barred from claiming the grant on behalf of their clients.
5th May 2020
On 4 May HMRC started to contact taxpayers who it believes are entitled to claim an SEISS grant, telling them to be ready to claim when the portal opens next week.
HMRC has also appealed to tax agents to help their clients prepare, but tax agents won’t be able to access the SEISS portal to make grant claims on behalf of their clients.
Genuine or scam?
The initial contact to self-employed taxpayers is being made by email. Or, if the taxpayer has no email, HMRC will text message where it has a mobile phone number. Only where HMRC does not hold an email address or mobile phone number for the taxpayer will it send a physical letter, but this letter may not arrive until next week.
There are already numerous scam texts circulating purporting to be from HMRC, such as the one reported by AccountingWEB reader codling in which their client was asked to reply with their UTR number. As codling noted this information could be used by the scammer to make a fraudulent claim.
The genuine emails and texts from HMRC do not include an active link to click on, they only tell the taxpayer to be ready to claim.
Not necessarily eligible
The fact that the taxpayer has received this initial contact about the SEISS grant from HMRC doesn’t mean that they will meet all the criteria to receive the grant. HMRC will have the information about the trader’s profits for the years to 2018/19, but to claim the SEISS the taxpayer must also have traded in 2019/20 and be intending to trade in 2020/21. This information about current and future trading intentions will not yet be available to HMRC.
The other conditions for the SEISS grant are discussed in Coronavirus self-employed scheme: Get the details right.
HMRC is encouraging taxpayers to use its SEISS eligibility checker tool to check whether they can claim. However, this online tool only asks for the taxpayer’s UTR and NI numbers, it doesn’t ask about current or future trading intentions. Tax agents can use this checker on behalf of clients, and ask HMRC to review the case if they think a client has been incorrectly rejected as ineligible to apply.
The taxpayer is not required to use the checker tool in order to make a SEISS claim. However, if they do use it and provide an email address as requested for further correspondence, this may speed up the process of the claim. HMRC will use that email address to tell the taxpayer exactly when the SEISS portal will be open for them. This will be a specific date between 13 and 18 May, with different days allocated to different taxpayers.
Locked out
The ICAEW said its members will be very disappointed that there is to be no agent access to the SEISS portal. The professional accountancy bodies have pressed HMRC for agents to be included in the process. But as Glyn Fullelove, president of the CIOT, confirmed, there was a balance of priorities between the speed of implementation and the extra functionality required to add agent access.
Tony Margaritelli, chair of the ICPA, said the exclusion of tax agents from the SEISS portal went down like a lead balloon with his members. He added, “Accountants are appointed by clients to look after their affairs and are trusted to do exactly that but yet at the time of their most pressing need HMRC is denying us the ability to do just that.”
The difference between the SEISS and the CJRS for furloughed employees is that the employer must provide the calculations of pay for the furlough employees, and hence accountants and payroll professionals have to be involved. The SEISS does not require the taxpayer to make any calculations, so perhaps this swung the pendulum towards speed and against agent access.
It has been pointed out that the declarations required as part of the SEISS application, of intention to trade and whether the trade has been adversely affected by the coronavirus, can only be made the individual taxpayer.
HMRC has advised that agents should not use their clients’ credentials to apply for grants on behalf of clients and that doing so may trigger HMRC fraud checks and delay payment of the grant.
There will be a telephone-based SEISS grant application service for the digitally excluded to use, but HMRC has not released any details of that yet.
HMRC releases guide for self-employed, members of partnerships
HMRC has released guidance on the Self-Employment Income Support Scheme targeted at the self-employed or members of a partnership that have been adversely affected by coronavirus.
Maja Garaca Djurdjevic
May 06, 2020
The scheme allows the self-employed and members of a partnership to claim a taxable grant of 80 per cent of their average monthly trading profits, paid out in a single installment covering three months, and capped at £7,500 altogether.
This is a temporary scheme, but it may be extended, the HMRC noted.
"If you receive the grant you can continue to work, start a new trade or take on other employment including voluntary work, or duties as an armed forces reservist," the tax authority explained.
It reminded that the grant will be subject to income tax and self-employed national insurance.
"HMRC will work out if you’re eligible and how much grant you may get," it said.
According to HMRC, eligible entities include self-employed and members of a partnership that traded in the tax year 201-19 and submitted a self assessment tax return on or before 23 April 2020 for that year; traded in the tax year 2019-20; intends to continue to trade in the tax year 2020-21; or that carries on a trade that has been adversely affected by coronavirus.
The HMRC explained that a business could be adversely affected by coronavirus if, for example they are unable to work because they are self-isolating; on sick leave because of coronavirus; have caring responsibilities because of coronavirus; have had to scale down or stop trading because their supply chain has been interrupted or they've lost customers.
Fore more information click here.
‘Pay now or pay later,’ but don’t forget it’s a debt
UK Chancellor’s VAT extension will help businesses survive during crisis, but it remains a debt, warn accountants
Author Leanna Reeves
Date published May 5, 2020
Accountants are being forced to remind clients that HMRC’s VAT deferral will end and payments will need to be made.
“The VAT deferral scheme is one of the things that will help some of those businesses stay alive along with several the other government support measures, but it’s just a deferral. It’s a situation that still must be dealt with next year,” says Julie Palmer, partner at Begbies Traynor.
“Businesses need to remember that it helps now, in terms of the emergency cash reserves, but looking forward 12 months’ time, they will have to face a period where the normal VAT liability needs to be paid. It’s survival for today – it’s not a debt that is going to disappear, it will need to be replaced at some time and it’s important not to forget.”
The deferral of VAT payments announced by the chancellor in late March came as a relief for SMEs struggling to maintain cash reserves – a measure also welcomed by accountants.
“The coronavirus time-to-pay hotline, announced in the Spring Budget, was becoming overloaded with businesses ringing up to agree deferment of taxes with waiting times to speak to someone at HMRC creeping up to two hours,” says Tim Stovold, head of tax at Moore Kingston Smith.
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“The automatic deferment of VAT payments without having to seek specific agreement from HMRC took some of the pressure off this hotline and freed up time for the individuals to focus on running their business rather than waiting on hold for HMRC to speak to them.
“There are a number of our clients, particularly those involved in e-commerce where their business has suffered no downturn, who are able to make the payment without any hardship so are just paying it as normal,” he adds.
Several businesses have also opted for monthly repayments due to fear of not being able to repay a single colossal tax bill.
“There are other clients who don’t want to store up problems for the future if they can be avoided so would rather make the payment now to avoid a double payment in the future when this catches up with them. For those that have been forced by their own circumstances to take the deferment, more than a few are planning to repay the VAT in installments over the next few months so they avoid the catch-up payment hitting them in one go later,” says Stovold.
UK VAT registered businesses that have any VAT payment due between March 20, 2020 and June 30, 2020 now have the option to defer the payment until March 31 next year, with no penalties or interest cost.
HMRC updated its guidance on April 27 as it stated that businesses will only be able to defer payments made quarterly and monthly for period ending in February, March and April.
VAT registered businesses that choose to defer their tax returns payment are not required to notify HMRC but will need to cancel their direct debit.
Furlough: New job starters 'left behind' despite scheme extension
By Alex Regan BBC News
7 May 2020
Since the coronavirus lockdown began nearly a quarter of the UK's workforce has been furloughed.
More than six million people are having 80% of their wages, up to £2,500 a month, paid by the government while they are temporarily on leave from their jobs.
But hundreds of thousands of workers have fallen through the cracks because they started new jobs around the time the impact of the pandemic would have started to become clear,
Despite assurances of a "more generous" scheme for new employees, many have been forced to take unpaid leave, seek new work, or explore claiming benefits.
'Government promises are a smokescreen'
When the government's job retention scheme was announced, it was only open to people who had been registered on their employer's PAYE system by 28 February.
But last month the government announced it was extending the scheme to people employed by 19 March.
Campaigner Natalie Greenway, from Hinckley in Leicestershire, said: "At the beginning I looked at it and thought, 'oh great, this means I get to be furloughed now', because I started my new job on 16 March."
But to qualify, an employee will need to have had an RTI (Real-Time Information) submission, or payslip, sent to HMRC. Many new starters got paid at the end of March and therefore would not qualify for the new extended scheme. "It's a smokescreen, and a bit of a PR stunt. It isn't a change," Ms Greenway said.
Chief executive of UK Hospitality, Kate Nicholls, said the RTI stipulation could affect between 350,000 and 500,000 people in her industry alone. She told a Treasury Committee hearing that people who thought they were eligible for the furlough scheme, because they were on their employer's payroll by 28 February, were being excluded because they were not paid by 19 March.
A Treasury spokesperson said employees "always had to be included on an RTI submission" and this was not a new requirement.
'I've barely got any money left for food'
Jasmin Mayes, from Sutton-in-Ashfield in Nottinghamshire, started her new role on the first day of the lockdown. She had moved from a job at a window supplies company to work at an aeronautics firm. But the single parent is now waiting for universal credit after her new company made her redundant and her old employer refused to take her back.
She said: "I've done a benefits calculation and if it's correct it will just cover my bills without any food or petrol. "My child maintenance has now stopped from her dad as he lost his job, so this month we will receive £83.85 in child benefit and that's everything." Her daughter Elodie is not eligible for free school meal vouchers until the universal credit claim comes through in June. "What's left now has to last until I'm able to find work again," she added.
I'm looking for delivery or fruit picking jobs'
Despite starting his job before 19 March, the father-of-two is another who is not eligible for the government's furlough scheme. "It's fairly common practise that you get paid at the end of the month," he said. "I don't think many people will be saved by this, there'll be a lucky few who'll get something. But the monthly paid among us, no."
As a result, he has decided to take a mortgage holiday and has been looking for work as a delivery driver, or fruit picker. "I'm not willing to work in a supermarket because I don't want to bring a virus home to my family, I'm not going to risk their health," he said. "It's an employer's market, and it's tough if you're applying for a role outside of your experience."
'I was one of the lucky ones'
Neil Walker from Hinckley, Leicestershire, began a new job in renewable heating technology on 2 March. Initially that start date meant he was not eligible for the furlough scheme, but after the date changed he was hopeful he would benefit. As he is paid in the middle of the month his employer made an RTI submission by 19 March. "I was one of the lucky ones," the 49-year-old said. "If I wasn't furloughed I'd be facing the financial abyss, my partner only works part-time and she's been furloughed. "I think it's so unjust, nobody knew this was going to happen, no-one knew the implications of moving jobs."
'I can't furlough 85% of my workforce'
Richard Potter was excited at the beginning of the year as he had set up a new curtain and blinds company with his business partners in Merseyside. But when non-essential retailers shut their doors, orders began drying up and the start-up had to look at furloughing staff. "But of the 46 people we employ we can only furlough seven," Mr Potter said. "We've been unable to pay anybody since the end of March. "It's terrible from an employer's point of view. "Do I make them redundant? Do I put them on zero-hours contracts? Being a new business we don't have the reserves to pay.
Mr Potter said the government's scheme was penalising "people who were moving jobs for the right reasons". The Treasury said firms could re-employ people who had left so they could be "put back on payroll and furloughed". But Mr Potter said he had "a lot of sympathy" for ex-employers who would not take people on again because of the future cost implications of making people redundant. His business's sewing staff have been returning to work to make surgical gowns for the NHS, the sales of which will cover some of his staff's wages.
A Treasury spokesperson said the government's job retention scheme had helped "to pay the wages of more than six million furloughed jobs". They added by extending the scheme "we have provided support for thousands of extra people, whilst keeping the significant fraud risks under control".
Bank of England projects worst UK economic slump since 1706
PUBLISHED THU, MAY 7
KEY POINTS
In its “illustrative scenario” for the economic outlook, the Bank said it expects U.K. gross domestic product to fall by 14% over 2020 as a whole, driven by a 25% decline in the second quarter.
Given the assumed relaxation of social distancing measures, however, the BOE expects the fall in GDP to be temporary and followed by a rapid recovery.
Since the beginning of the pandemic, the BOE has cut rates twice from 0.75% to 0.1% and announced £200 billion ($247.55 billion) of new quantitative easing, bringing its bond buying program to a total of £645 billion.
The Bank of England (BOE) on Thursday held interest rates at 0.1% but said it stands ready to take further action should the economic crisis caused by the coronavirus pandemic continue to deteriorate.
The bank’s Monetary Policy Committee (MPC) voted unanimously in favor of keeping rates unchanged for now. With a majority of 7-2, the committee also voted to continue with its planned £200 billion ($247.55 billion) quantitative easing program, bringing its bond-buying program to a total of £645 billion. Two members of the committee favored an additional £100 billion of stimulus.
In its “illustrative scenario” for the economic outlook, the bank said it expects U.K. gross domestic product (GDP) to fall by 14% over 2020 as a whole, driven by a 25% decline in the second quarter. This would be the sharpest annual downturn since 1706, according to historical Bank of England data.
Given the assumed relaxation of social distancing measures, however, the BOE expects the fall in GDP to be temporary and followed by a rapid recovery.
It sees GDP hitting its pre-Covid levels in the second half of 2021 and growing by 3% in 2022. However, it stressed that these projections were contingent on domestic and Covid-19 global containment measures.
This BOE’s economic outlook scenario also expects unemployment to be at 8% in 2020, 7% in 2021 and 4% in 2022.
Since the beginning of the pandemic, the central bank has cut rates twice from 0.75% to 0.1% along with the £200 billion ($247.55 billion) of quantitative easing, bringing its bond buying program to a total of £645 billion.
“The MPC will continue to monitor the situation closely and, consistent with its remit, stands ready to take further action as necessary to support the economy and ensure a sustained return of inflation to the 2% target,” the BOE said in its report.
Last month’s PMI (purchasing managers’ index) readings plunged to record lows and the U.K. is expected to suffer its deepest economic downturn in living memory as a result of the coronavirus crisis.
“Nonetheless, because a degree of precautionary behavior by households and businesses is assumed to persist, the economy takes some time to recover towards its previous path,” the report said.
“CPI inflation is expected to fall further below the 2% target during the second half of this year, largely reflecting the weakness of demand.”
The British government will announce the outcome of its second review of lockdown measures on Thursday, after the U.K. surpassed Italy to record the highest fatality rate in Europe.
As of Thursday morning, the U.K. has recorded more than 202,000 cases of the coronavirus and more than 30,000 deaths.
Coronavirus: New Hardship Fund announced
5 May 2020
Scheme to help local micro-businesses affected by coronavirus (COVID-19)
The Department for the Economy has announced a new business Hardship Fund.
The scheme will aim to assist businesses in Northern Ireland with less than ten employees that require financial support due to the impact of COVID-19.
The funding will be available to businesses which have not qualified for the £10,000 small business grant and the £25,000 Retail, Hospitality, Tourism and Leisure scheme. These grants close to applications on Wednesday 20 May.
Social enterprises and charities will be able to access the Hardship Fund if they meet the eligibility criteria.
Around 8,000 businesses across Northern Ireland will qualify for this new financial support scheme.
Details on the Hardship Fund, including scheme eligibility criteria will be available in the week beginning 11 May.
Source: https://www.nibusinessinfo.co.uk/content/coronavirus-new-hardship-fund-announced
HMRC opens self-employed income support early on May 13
5 MAY 2020
Taxman to start accepting applications for Self-Employed Income Support Scheme on May 13, earlier than announced and HMRC has already started writing to the self-employed encouraging them to apply for self-employed income support
The taxman has already begun notifying the self-employed if they are eligible for the SEISS.
Previously chancellor Rishi Sunak had announced the scheme would open in June.
The claim service will open on May 13 and payments to eligible workers will be made by May 25, or within six working days of completing an application.
Approved claims through the self-employed income support will be made within six working days.
The Self-Employed Income Support Scheme will allow you to claim a taxable grant of 80 per cent of your average monthly trading profits, paid out in a single instalment covering three months, and capped at £7,500 altogether.
HMRC says this temporary scheme may be extended.
The grant will be subject to Income Tax and self-employed National Insurance.
You can check if you’re eligible to claim through the HMRC website here.
Self-Employed Income Support
While the accelerated scheme will be welcomed by the 3.8m self-employed workers thought to be eligible, the government’s decision to press ahead with the Self-Employed Income Support Scheme disappoint up to 2m people who it has been estimated will not qualify for the bailout. Workers unable to claim for the bailout include people who, on average, have earned more than £50,000 a year.
Although the Association of Independent Professionals and the Self-Employed (IPSE) welcomed news that self-employed people are being told early if they are eligible for government support, it urged the government to get payments to them too.
Andy Chamberlain, IPSE policy director, said: “We hope the government will also bring forward the payment date, to get money into these struggling self-employed businesses as soon as possible.
“While many self-employed people will get a wave of relief from receiving these early notifications, it is vital we do not lose sight of the many others who are not getting the support they need. Limited company contractors, the newly self-employed and those who have earned just over £50,000 a year have been left out in the cold and urgently need more financial support.
“The self-employed are an extremely varied and vital section of the workforce and the government must keep innovating until it has pulled all parts of it out of the mire.”
Source: https://smallbusiness.co.uk/hmrc-opens-self-employed-income-support-early-on-may-13-2550268