This update is written and posted on 9th April 2020 and is likely to quickly become out of date.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.

Going into Easter weekend this will be our last daily update until next week, as we take a break, it has been crazy three weeks!  We understand that for businesses it has been difficult coping with the significant changes to the business, operating differently and trying to keep up to date with changes in working practice guidelines, Government support etc. (we are in the same boat). 

For those who can, take the Easter break as down time to relax!

If you want some quick simple easy tasks to look at over the break, these are our tips:

  1. Review and update cash flow, as the lock down is going to be extended. (Wales has already announced an extension).  Our advice has always been to plan as a minimum to end of June, so see if anything has changed, as well as updating for anything that has operationally changed, or monies received like the business rates grants. 
  1. If you are opting for a VAT deferral, make sure you have cancelled your direct debit.The VAT deferral means have the option to defer VAT payments due between 20 March and 30 June 2020. Businesses have until 31 March 2021 to pay any VAT deferred, so save the cash and only sue in an emergency were possible).  
You must continue to submit VAT returns as normal.  (You must pay import VAT and customs duties in line with existing rules and deferral doesn’t apply to MOSS).
You don’t need to inform HMRC of the decision, just cancel direct debit.
  1. If you are going to claim grants through the coronavirus job retention scheme, or the self-employment income scheme, it is likely you are going to need a Government Gateway account for your business. If don’t have one for your company or as self-employed individually, set one up now. 
  1. If you are going to claim the self-employment income scheme and haven’t filed your 2019 self-assessment tax return, then deal with asap. To be eligible you must have submitted a self-assessment tax return for 2019, and you must do this by 23 April 2020
  1. If your Company has an R&D claim, or you wish to consider making one, which could result in a tax repayment/saving, start to review the work/projects undertaken, which may be eligible. We will be happy on our return to discuss. 

Job Retention Scheme (aka furlough)

We have set out below in short bullet points, some key points/messages about the job retention scheme, which we regularly get asked about.

  • Employees still working, but on reduced hours are NOT eligible for the scheme. It is either work or not work – no halfway;
  • Employees self-isolating, receiving Statutory Sick Pay are NOT eligible; 
  • Employees that are SHEILDING (i.e. not sick, but vulnerable so must self-isolate) ARE; 
  • Employees that have caring responsibilities (i.e. children) ARE; 
  • Employees with more than one employer, CAN be furloughed on each job; 
  • Employees CAN be furloughed in one job but continue working for another employer, as long as there is no exclusivity clause in either employment contract;
  • Directors, salaried members of LLPs, agency workers ARE eligible if paid via PAYE.  Directors who have responsibilities and duties under the Companies Act 2006 which they must comply with, but they MUST NOT do any work to generate revenue or provide services to or on behalf of their company.   The decision to furlough directors must be documented (we advise a set of board minutes) and communicated in writing to the directors concerned, with evidence of their agreement to be furloughed also documented, as you would with employees;
  • Best practice to create an objective selection procedure to govern how you decide who to furlough. This will ensure you’re fair and consistent, limiting the risk of falling foul of discrimination law. The process and decision documented;
  • You need the agreement from the employee.

Holiday while on furlough

As at 9th April 2020, there is no clear government guidance on this question of holiday while on furlough. ACAS have changed their opinion and now say that holidays may be able to be taken, and several commentators on the point have differing views.  We are not lawyers, and this is a legal question, although HMRC may give guidance in their next update. 

The risk of allowing holiday to be taken is that if it turns out not to count as Furlough, then it will remove the ability to lawfully claim back the 80% pay for an entire 3-week period (the minimum furlough).

It is accepted that commercially, if employees don’t take holiday while on furlough, that holidays continue to accrue, so that in future, the employer will need to fund these holidays being taken, perhaps when the business starts “ramping” back up.

This is a watch this space. 

HMRC Helplines

HMRC helplines are under significant pressure due to staff shortages and increased demand. The hours on all lines have been reduced to 08:00 to 16:00 and they are closed at weekends. HMRC advises that the lines tend to be least busy between 08:00 and 10:00 (they will not be now!).

HMRC has set up a specific helpline for businesses struggling to pay their tax due to the COVID-19 crisis but, this line is also busy even with extra resource brought in.  HMRC recommends that businesses wait until just before their tax is due before contacting them to discuss time to pay.

Please note that It is not necessary to contact HMRC to defer VAT payments or self-assessment payments on account  - the deferral is automatic.

Non-Government Financial Support

When we find a non-Government funding opportunity, however small we always let you know. So that this information is in one place, which we will update, when find new sources we will update the list, which can be found at HERE

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.

Wishing you all a happy, healthy Easter weekend from all at HK

Remember to #stayhome