Here, we cover questions from episode 3 of ICB TV
New information on the self-employed
The COVID-19 hub on our website contains all the information we have so far and is based on the Chancellor’s statement on 26 March and subsequent updates on the gov.uk website. This will also include partnerships.
Owner/director businesses - in theory at least, directors can be furloughed. However, they can’t assume any work for the organisation during the furlough period. This may prove to be challenging to demonstrate, especially if they are the sole director.
Furloughing employees – additional questions
Start dates for employees the details are now clear that employees must have been on the payroll on 28 February to qualify for being furloughed. So, any employee starting after this date cannot be furloughed and must rely on other benefits such as Universal Credit.
More than one job - each job is independent so an individual can be furloughed by one employer and not the other or perhaps furloughed from both jobs.
Changing the status of employees - the government designed the scheme to be flexible and to enable staff to return to work. However, if an employee is furloughed, they must remain furloughed for a minimum period of three weeks. After this, if they agree to it, they can be furloughed again. This, in theory, allows the possibility of employees being able to be brought back to cover for their colleagues, but it will depend on their contract.
The amount payable - it is now quite clear that the amount payable is based on the higher of the relevant month from 2019 or the average over 12 months. So, the question that came in about putting up the March wage means that the business can pay the individual what it likes but the 80% and £2500 is the maximum that can be claimed back as part of the grant. Therefore, increasing the March salary would have little effect on the computation.
Maternity leave returners - employees on maternity leave and pay should remain on that until their return date (as SMP is recoverable in full) and can then be furloughed on their return. What has not been mentioned yet is how their basic wage will be calculated.
The portal and payroll agents - still nothing about payroll agents being able to apply for the grant on behalf of their clients - we probably need to wait until the portal is open. It is the employer who gets a refund but still not clear who applies.
Submitting VAT returns for closed businesses - if you have to submit a VAT return and the business has closed down but you need to attend the premises to complete the return (if they have desktop software for example) then it might be possible to arrange to go in provided that you follow the social distancing rules. The submission of the VAT return should not be delayed. Alternatively, you could try (with full agreement with your client) to gain remote access to their computer and work from that.
Payroll for March/April - you should pay staff for the hours they worked at the normal rate (and under their contract of employment) and then show the furloughed amount for the remaining time. All submissions under RTI should be carried out as normal to preserve the data online.
Vulnerable persons - HMRC guidance states ‘’Employees from defined vulnerable groups should be strongly advised and supported to stay at home and work from there if possible.’’ I would imagine that the normal suggested rules apply, so everyone should work from home where possible and if there isn’t any work, they should be furloughed. This also applies to partners of vulnerable individuals. If they choose not to work and there is work for them then this may constitute redundancy, but each case should be dealt with individually.
Business interruption loans for the self-employed - to see if self-employed individuals can apply for the loan, look at the details on the British Business Bank website to see the list of lenders who are participating. The loan is interest-free for 12 months, but at present, the rate of interest thereafter is quite high. Alternatively, investigate the Small Business Grant scheme for those who pay little or no business rates. Details of the self-employment grant scheme were published yesterday and can be found on our COVID-19 hub. All businesses that can apply for the small business grant will be contacted by their local authority except in Scotland where you must apply yourself. However, no matter where you are, it would be useful to be proactive to see what the current situation is and to get the process going.
Sub-contractors - if sub-contractors are self-employed then they should use the self-employed grant scheme. They are not considered employed, so they would not fall under the job retention scheme.
Apprentices - there has been no definite information on the payment to apprentices who are already on a very low hourly rate. The IFA has issued guidance on extending the length of their apprenticeship to cover reaching the End Point assessment period. However, guidance has been issued to anyone who undertakes training during this period, highlighting that the minimum wage should be paid for the time they are training. Details, however, are not clear.
Holiday accrual and pay - several questions asked about accruing holiday and how much should be paid. At present, it is unclear as to what will happen here as there is not any specific guidance.