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Accura Accountants – Update

I do hope all clients and families are keeping well and I would like to thank the considerable number of recipients of my emails for their positive response and encouragement.

Although we all have major worries about the personal health of our families, friends and our businesses, my advice is to use the time wisely by planning futures and there will be a future !

I have advised numerous clients that it is essential to alleviate current financial strain by contacting building societies and other such loan institutions and take advantage of their assistance to a deferment of payments. Equally approach credit card providers to follow suit.

There will be life and business after this hibernation period and although as it appears HMRC are offering various life lines (see below) it is still incumbent on all businesses and taxpayers to submit VAT (if applicable), tax returns and accounts to HMRC /Companies House.

I suggest that during this hibernation period, all clients take this opportunity to ensure all financial records are brought up to date. Ensure information for tax returns based on all income to 5^th April 2020 are collated and sent to Accura Accountants to ensure these are completed earlier than usual. Use this opportunity (if one could call it an opportunity) to save time later when all our attention will be needed to get businesses back up and running. 

CURRENT NEWS

A package of measures to help the self-employed workers during the coronavirus lockdown will be unveiled by the Chancellor today. Rishi Sunak will outline the assistance offered at the government’s daily COVID-19 press conference. This is planned to be at 5.00 pm.

I anticipate that the self-employed may receive similar funding as employed staff, but this will be based on declared and tax paid income for year ended 5^th April 2019. I await whether the Government will also take a similar view on directors and whether consideration will be given to total income of which tax is paid or whether they will discount dividends.

Obviously, such consideration should be given to people in receipt of rentals income, however we must all take on board the difficulty the Government will face with providing assistance in these areas. I appreciate that rental income could be seriously affected when tenants cannot pay or use excuses, and landlords are being “handcuffed” by a Government interjection in usual collection procedures. 

I have also been requested by many clients and even friends of clients where their accountants are not giving advice, so I apologies if I repeat and highlight current concerns.

Do we have to pay staff Furloughed? – Yes

How do we get the 80% of maximum income £2500 per month =£2000

As and when the HMRC portal is up and running 

Quick checklist

1. Furloughed members of staff must not work for the employer during the period of furlough.
2. Furlough is from 1 March 2020, so can be backdated. It will last for at least 3 months and will be extended if necessary. Note that while the scheme is backdated to the beginning of March as it is intended to support all those employed then, a firm will only be eligible to claim the grant once they have agreed the furlough with their staff and staff have stopped working for the employer. This will of course be subject to employment law in the usual way.
3. MUST write or email all staff and obtain agreement
4. It is available to employees on the payroll at 29 February 2020.
5. All UK businesses are eligible, ‘any employer on the country, small or large, charitable or non-profit’ to use the Chancellor’s words.
6. The scheme pays a grant (not a loan) to the employer.
7. The grant will be paid to the employer through a new online system which is being built for this purpose, NOT YET AVAILABLE.
8. The employer will pay the employee through payroll, using the Real Time Information (RTI) system as usual, as required by the employment contract. This contract may be renegotiated but that is a matter for employment law. So RTI system reporting of payroll will continue as normal.
9. MUST maintain PAYE normal submissions known as RTI , next submission due to 5^th April 2020 ,submitted prior to 19th April 2020.
10. Scheme will be administered by HMRC:
    • Relevant employees must be designated as furloughed employees.
    • Employers will submit information to HMRC through a new online portal.
    • As this will take time to build, businesses should look to the Coronavirus Business Interruption Loan Scheme (A)  to support cash flow in the meantime. The narrative used in the information released so far says ‘if your employer cannot cover staff costs due to COVID-19 they may be able to access support…’. This is a conditional phrase which may relate to existing funds available to the employer. We do not yet know how these might be determined, nor whether there is a bar of some description.
11. I am very concerned that funds referred to in red above (A) will be very difficult to obtain in short period and as yet information is VERY vague as to how to claim and what information is required for such consideration.  As usual a total nightmare. 
12. Maximum grant will be calculated per employee and is the lower of:
    • 80% of ‘wages’. The notes published so far, use the phrase ‘wage for all employment costs up to a cap of £2,500 per month’. It is our understanding that this includes employers’ NIC and pension contributions. Wages will be determined by reference to a defined period (yet to be announced).
    • £2,500 per month.
13. As all clients will note , we are as I type still unclear of the way forward in respect of offers and assurances by HM Government.