Vale & West Chartered Accountants Blog

Category Archives:COVID-19 Updates

CJRS – Upcoming changes to payments and the furlough scheme

The Coronavirus Job Retention Scheme (CJRS) continues to support many businesses, who are reliant on the financial support it offers to cover the costs of staff on furlough.

Extended earlier this year in the Budget, support from the CJRS will slowly be withdrawn in the next three months before closing altogether at the end of September.

The withdrawal of this scheme could have a substantial financial impact on businesses and so they must be prepared for the changes ahead.

As with the existing scheme, furloughed employees will continue to receive 80 per cent of their usual wages capped at £2,500 a month, or equivalent weekly or daily figures, for usual hours not worked right up until the scheme ends later this year.

However, from 1 July, employers must make a 10 per cent contribution to these costs, as the Government grant will only cover 70 per cent of the costs (capped at £2,187.50).

In August and September, the Government grant will then drop again to 60 per cent (capped at £1,875), meaning that employers must make a 20 per cent contribution to the amount paid to employees.

The calculation of usual wages is still based on the last pay period before the employee became eligible for furlough.

Those dates vary, depending on whether the employee was reported to HMRC on or before 19 March 2020, 30 October 2020 or 2 March 2021.

Any pay rises since an employee’s reference date are not taken into account for any time they are furloughed.

Employers need to make early assessments as to whether they will continue to support furloughed employees going forward, especially if they are considering making redundancies as a result of the withdrawal of funding.

Employers need to remain mindful of their obligations in relation to collective redundancy consultation as, depending on the number of redundancies they intend to make, they may be required to report redundancies to the Secretary of State for Business, Energy and Industrial Strategy either 30 or 45 days in advance of dismissing employees.

If you need assistance with the changes ahead or are concerned about the potential cost implications of the furlough scheme ending, please contact us.

Coronavirus furlough and loan schemes further extended

As businesses prepare to enter a new year, the Chancellor Rishi Sunak has confirmed a further extension to the Government-backed loans and Coronavirus Job Retention Scheme (CJRS).

In a move that the Chancellor said would provide “certainty for millions of jobs and businesses”, the Government has extended the furlough scheme until the end of April 2021.

Under the latest extension, workers will continue to receive payments equal to 80 per of their wage, while employers will only be required to pay wages, National Insurance Contributions (NICS) and pensions for hours worked, and NICS and pensions for hours not worked.

The eligibility criteria for the UK-wide scheme will remain unchanged, meaning that those currently benefitting from the scheme can continue to do so.

The Government has said that by extending the scheme “businesses across the country will have certainty about what support will be available to them”.

The Chancellor had intended to review the furlough scheme in January but is said to have brought this date forward to help businesses plan for the year ahead.

During his announcement, Rishi Sunak also confirmed that he would be extending all of the Government-guaranteed COVID-19 business loan schemes, including the Bounce Back Loan and Coronavirus Business Interruption Loan Scheme, until the end of March 2021.

Applications for these loan schemes, which has seen more than £68 billion in guaranteed loans delivered to businesses, had been due to close at the end of January 2021.

As well as announcing extensions to the current financial support measures, the Chancellor said that he would hold his next Budget on 3 March 2021.   This budget will deliver the next phase of the plan to tackle the virus and protect jobs.

If you require support with these business support loans or help administering the furlough scheme, please speak to our experienced team.


HMRC: Penalty payments for non-compliance increase by 62 per cent

HM Revenue & Customs (HMRC) penalties for non-compliance by taxpayers have risen by 62 per cent, according to the latest research. Read More

CJRS: Deadline for November claims fast approaching

Claims under the Coronavirus Job Retention Scheme (CJRS) for November must be submitted no later than 14 December 2020, it has been cautioned. Read More

HMRC updates Statutory Residence Test due to COVID-19

New guidance has been issued by HM Revenue & Customs (HMRC) which alters how the Statutory Residence Test (SRT) for tax will operate as a result of the COVID-19 pandemic.

The latest COVID-19 guidance is likely to affect taxpayers’ ability to move freely into and out of the UK, which could affect their status under the SRT.

The SRT came into effect in April 2013 and allows a taxpayer to work out their residence status for a tax year.

For day counting under the SRT, HMRC has confirmed what it considers exceptional circumstances that would allow a taxpayer to disregard up to 60 days spent in the UK. This includes where a taxpayer is:

  • Quarantined or advised by a health professional to self-isolate in the UK as a result of the virus;
  • Advised by official Government advice not to travel from the UK as a result of the virus;
  • Unable to leave the UK due to the closure of international borders; or
  • Asked by an employer to return to the UK temporarily as a result of the virus.

Guidance was also issued earlier this year in August, but there has been no extension to the maximum limit to the number of days which can be disregarded, which remains at 60 days, despite the scale of the pandemic.

The existing rules surrounding a “significant break” from overseas work will also remain unaltered, according to HMRC.

Days worked in the UK by a non-resident due to COVID-19 imposed restrictions will also not be taxed for employment income related to periods starting from the day the non-resident intended to leave the UK and the date they eventually left, if:

  • The income is taxable in the individual’s home country, and
  • The individual left the UK as soon as they possibly could.

However, individuals may be required to provide evidence for the above to HMRC. Any days spent in the UK. where the individual worked more than three hours, whilst not taxable, will still count towards the 30 UK work days allowed as part of the SRT.

The Finance Act 2020 has enacted changes to the day count for those non-resident individuals in the UK between 1 March 2020 and 1 June 2020 working on COVID-19 related activities. These activities will not count towards the residence test.

If you are affected by changes to the SRT due to COVID-19 you must seek advice at the earliest opportunity.

Coronavirus: Pubs in tier two and three areas set to receive new £1,000 grant funding

Pubs that principally serve alcohol in tier two and three areas are set to receive additional financial support over the Christmas period following an announcement by the Government. Read More

COVID-19: Time is running out to make November furlough claims

Businesses have just days left to make a claim for staff furloughed in November, with the deadline ending on 14‌‌‌ ‌‌December 2020. Read More

Self-employed profits must be “significantly reduced” to claim third SEISS grant, says HMRC

Self-employed workers’ profits must be “significantly reduced” in order to claim the third instalment of the Self-Employment Income Support Scheme (SEISS), it has been revealed. Read More

Companies House to scrap paper reminder letters

Companies House has announced that businesses will no longer receive reminder letters, as it seeks to end paper communications.

Businesses across the UK have been receiving a notification letter by post letting them know that Companies House is withdrawing this service, as it seeks to save £1.2 million annually.

Instead, companies will be asked to use the email reminder service, which sends automated alerts to up to four addresses when documents are due and allows businesses to file information immediately from a link within the email.

You can sign up for the new email reminder service below by following the simple application process.

Click here sign up for the Companies House email reminder service

As part of this process, you will be required to sign in to the Companies House online filing service. If you are not yet registered for this, you need to do so before starting.

These reminders play an important role in ensuring you remain compliant with your Companies House obligations. Failure to submit the right documents on time could result in a penalty.

If you require assistance with any Companies House matters, please feel free to contact us.

HMRC to investigate Eat Out to Help Out scheme claimants

Registered users of the Eat Out to Help Out scheme (EOTHO) should check their claims to ensure that money has not been paid out incorrectly, HM Revenue & Customs (HMRC) has announced. Read More

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