COVID-19 - HK UPDATE 8th APRIL 2020
THE SINGLE MOST IMPORTANT ACTION WE CAN ALL TAKE IN FIGHTING CORONAVIRUS IS TO STAY AT HOME IN ORDER TO PROTECT THE NHS AND SAVE LIVES.
This update is written and posted on 8th April 2020 and is likely to quickly become out of date. We will endeavour to update information as it becomes available.
Previous updates and other useful information can be found at our WEBSITE.
Job Retention Scheme (aka Furlough Scheme)
We had a good insight to HMRC’s progress on the Job Retention Scheme today regarding putting in place a system so that payments could be claimed. Jim Harra, Head of HMRC, spoke today at a virtual Treasury Committee hearing, making a number of statements regarding progress and the operation. We have summarised the important bits below:
- HMRC’s in-house IT developers and outsourced IT provider CapGemini, have been working 24/7 to complete all the preliminary code changes to create the new furlough reporting portal;
- Phase one testing with a small number of selected PAYE employers started today;
We are confident that it will be able to handle the large volume of employers that will use it. It is important that the maximum number will be able to self-serve. We will be issuing guidance next on how to compile claims.’
- HMRC are working to have the portal open on 20 April for employer submissions, giving a 10-day window to month end for PAYE payroll reporting;
- It was stressed that the only way to get the scheme to work would be to ensure it is driven by self-service, as there could be millions of claims (see below) and HMRC’s coronavirus business hotline would not be able to cope with a surge in calls on the day the site opened. 3,500 HMRC staff will cover the launch and may draft in more via agencies to help, but HMRC is relying on accountants and payroll agents to get up to speed with the new system!
- Mr Harra made reference to the pressure HMRC was under and how the organisation itself has been affected by the coronavirus “before this we had about 18% of HMRC people working at home, now we have 80% working at home”.
Outside to the virtual committee meeting, there are rumours circulating that when the Government came up with the scheme, they were only expecting a 10% up take of the scheme, in the main from the leisure, retail and hospitality sector, that they closed on the same day as the announcement. Today the number is estimated to be at nearly 50% of employers taking up the scheme, based on figures from the British Chambers of Commerce.
In light of the significant uptake, which is likely to increase the longer the crisis continues, Mr Harra advised the committee that HMRC would pursue abusers of the system via the criminal courts, where it is found they knowingly tried or committed fraud. We have referred in previous updates, that HMRC require records to be kept for five years, which to us provides an indication of how long a period they will look to audit the scheme.
HMRC has already acknowledged reports of people on furlough still being asked to work by their employers and are urging furlough employees to report employers. (If the employee undertook the work request, then we think they could also be in “hot water” having signed a letter saying they cannot work).
Finally, as the Government has not yet released full details of how claims will work, it is currently anticipated that a government gateway account may be required in order to make a claim. Creating an account now, which is useful anyway, may avoid further delays to payment.
Government Letters to Industry Sectors
Last week we reported that the Government issued a letter to the construction industry, advising that they could continue to operate sites, provided safety guidelines are followed. Today, similar letters have been issued to the manufacturing and retail (online) sectors, advising they can stay open for business, provided safe to do so.
One wonders, if this is to encourage businesses to stay open, as opposed to closing and taking the furlough scheme route.
Letter to the Manufacturing sector.
Self-employed Income Support Scheme
Quick reminder for those eligible for the self-employment support scheme (details can be found HERE, one of the conditions is you must have submitted a self-assessment tax return for 2019, and if you have not you must do this by 23 April 2020.
- The British Business Bank's Start Up Loans program is still available for support for eligible businesses during the coronavirus outbreak. Details can be found at HERE
- BenSoc, a charity which supports professional photographers and photography lab technicians, is offering small grants. Details can be found HERE
- The BFI and The Film and TV Charity have partnered to create a fund with a £1m donation from Netflix to help support the creative community. More details HERE
- The Cheltenham based group, Family Space, has set up #FeedCheltenham – a project to support the local communities who are suffering at this difficult time, with a crowd fund SITE
Gloucester Gateway Trust have also set up a similar fund and crowd fund page, Both are looking for support, so they can help their communities.
Our summary of the Government’s support can be found at HERE
Breaking news - Coronavirus: Chancellor announces aid for charities, Chancellor Rishi Sunak has announced a £750m package to keep struggling charities afloat during the coronavirus pandemic.
We know that this is a very difficult time for all businesses and some difficult decisions are having to be made. We have spoken to many of you and for those we have not, we would like you to know that we are here ready to help if you need us to provide advice, deal with queries, or just be a business sounding board.