COVID-19 Emergency Measures (06.04.2020)
Job Retention Scheme Updates
New information has been released today confirming updates to the job retention scheme that many employers have been waiting for clarification on.
We have summarised below the key points that many of our clients have asked about, however there are multiple points clarified on the HMRC website here if you have niche circumstances that we have not previously covered:
- Directors can be furloughed if the only work they complete for the company is part of their statutory duties under the Companies Act 2006 such as ensuring accounts are prepared and filed, statutory documents etc. They cannot engage in activities that would be considered in the pursuit of generating revenue or providing a service.
- Furloughed employees may undertake training, as long as they are not providing services or generating revenue. The government is actively encouraging employers to ask their employee’s to take up training while furloughed. You must ensure that any training hours the employee completes they are being paid at the national minimum wage, although this can be covered by the furlough payment, most of the time their furlough payment will cover their training time.
- Employees may engage in volunteering or take a secondary employment if their contract allows it whilst furloughed.
- Wages should be reduced in your payroll software, i.e. if you are choosing to pay only the 80% of wages as part of the furloughment scheme that is what you would run through payroll. If you process the full amount then that is what the employee will be due to be paid, and you can then, later on, reclaim the 80%.
- There is no update to the timeline of when the portal will be available.
Business Loan Scheme Overhaul
From Monday 6th April the COVID-19 business interruption loan scheme has been significantly expanded to allow a greater number of businesses to be eligible for the scheme.
Most notably, the scheme has now been opened up to smaller businesses facing cashflow difficulties who previously would not have been eligible because they met the requirements for a standard commercial loan.
You may therefore wish to consider re-contacting your lender if you have previously been unsuccessful in securing funding.
Key new features of the scheme:
- No personal guarantees for facilities under £250k: Personal guarantees of any form can no longer be taken under the scheme for any facilities below £250k.
- Guarantees for facilities above £250k: Personal guarantees may still be required but recoveries under these are capped at a maximum of 20% of the outstanding balance of the scheme facility after the proceeds of business assets have been applied.
- A Principal Private Residence cannot be taken as security to support a personal guarantee or as security for a loan scheme backed facility.
- For all facilities, including those over £250,000, the loan scheme can now support lending to smaller businesses even where a lender considers there to be sufficient security to offer traditional finance, making more smaller businesses eligible to receive the business interruption payment.
Full details of the scheme are available on the British Business Bank website:
Statutory Sick Pay Changes
The government has clarified several points regarding the new SSP reclaim scheme, for those that were unaware you are able to reclaim SSP paid to an employee because they have COVID-19 or are self-isolating.
The scheme will repay employers the current rate of SSP that they pay to current or former employees for periods of sickness starting on or after 13 March 2020.
Statutory sick pay has been increased as of 6th April 2020 to £95.85 per week.
Sick pay relating to COVID-19 is payable from the first day and not the fourth day as normal. If the employee is self-isolating however it must be for a minimum of four days (they will still be paid from the first day if they meet the criteria).
You are able to reclaim this SSP paid if you meet the following criteria and you:
- are claiming for an employee who’s eligible for sick pay due to coronavirus
- had a PAYE payroll scheme that was created and started on or before 28 February 2020
- had fewer than 250 employees on 28 February 2020
You must keep records of all the statutory sick payments that you want to claim from HMRC, including:
- the reason why an employee could not work
- details of each period when an employee could not work, including start and end dates
- details of the SSP qualifying days when an employee could not work
- National Insurance numbers of all employees who you have paid SSP to