This month, the chancellor has announced the following Covid-19 related measures:
Extension of business interruption loan schemes: On 3 April, the chancellor announced an extension of the coronavirus business interruption loan schemes (CBILS) to maximise the support available for small businesses. In addition, a new large business scheme will provide support for larger firms not currently covered.
The CBILS is being extended to make all viable small businesses affected by Covid-19 eligible, not just those unable to secure regular commercial financing, and lenders will be banned from requesting personal guarantees on loans under £250,000. The chair of the House of Commons business, energy and industrial strategy committee, Rachel Reeves, wrote to the chancellor at the end of March expressing the committee’s concerns about the way the scheme was being rolled out.
The government has approved more than £90m of loans to nearly 1,000 SMEs under the scheme since its launch in March. However, according to the latest survey carried out by the British Chambers of Commerce (BCC) at the beginning of April, just 1% of firms had successfully accessed CBILS and 7% are receiving grants. While there is a high level of awareness of the government’s support schemes among businesses, the BCC suggests this is not translating into firms successfully accessing the schemes.
The new coronavirus large business interruption loan scheme (CLBILS), will provide a government guarantee of 80% to enable banks to make loans of up to £25m to firms with an annual turnover of between £45m and £500m. The CBILS only covers SMEs with a turnover of up to £45m. The CLBILS is not yet available but is expected to launch before the end of April.
Guidance on job retention scheme (JRS): On 4 April, the government updated its guidance on the JRS, expanding and clarifying a number of points in the version first issued on 26 March, following the original announcement on 20 March.
The scheme will provide a grant to cover 80% of the regular wage costs of ‘furloughed’ employees up to a maximum of £2,500 per month, plus the associated employer NICs and minimum automatic enrolment employer pension contributions.
The updated guidance specifically confirms that individuals can be furloughed if they are ‘shielding’ in line with public health guidelines, cannot work from home and would otherwise be made redundant. Individuals with Covid-19 related caring responsibilities, such as childcare due to school closures, may also be furloughed.
Claims can be made for furloughed employees that were on the PAYE payroll on or before 19 March 2020 and which were notified to HMRC on an RTI submission on or before 19 March 2020. Employees that were employed as of 28 February 2020 and on payroll and were made redundant or stopped working for the employer after that and prior to 19 March 2020, can also qualify for the scheme if the employer re-employs them and puts them on furlough.
More information is given on those individuals who are not employees, but for whom the grant can be claimed if they are paid via PAYE. These include: office holders (including company directors); salaried members of LLPs; agency workers (including those employed by umbrella companies); and ‘limb (b)’ workers (workers who are not also employees under Employment Rights Act 1996 s 230).
HMRC has confirmed it intends to launch its online service for making claims under CJRS on 20 April. In a letter being issued to agents, HMRC explains that businesses and agents authorised to act on their behalf for PAYE matters will be able to claim. For reasons of data protection, file-only agents, including payroll bureaux, will not be able access the service.
At a hearing before the Commons Treasury committee on 8 April, HMRC chief executive, Jim Harra, announced the setting-up of an online ‘whistleblower’ service workers can use to report employers who abuse the job retention scheme. HMRC will be on the lookout for employers who claim grants while asking ‘furloughed’ staff to carry on working. The department will be able to audit claims retrospectively and prosecute fraud.
The CIOT’s low incomes tax reform group (LITRG) welcomed the move, describing the setting up of a reporting facility before any grants are paid as a ‘vital safeguard’.
‘We await further details from HMRC to help us get the message out to workers that the hotline exists’, commented Victoria Todd, head of the LITRG.
The government has consolidated its guidance on support for businesses affected by Covid-19 at its coronavirus business support pages on the Gov.uk website. The Law Society has also published guidance and FAQs for law firms.
State aid approval: The European Commission has given state aid approval for these types of schemes under its temporary framework agreed for the Covid-19 outbreak.
This month, the chancellor has announced the following Covid-19 related measures:
Extension of business interruption loan schemes: On 3 April, the chancellor announced an extension of the coronavirus business interruption loan schemes (CBILS) to maximise the support available for small businesses. In addition, a new large business scheme will provide support for larger firms not currently covered.
The CBILS is being extended to make all viable small businesses affected by Covid-19 eligible, not just those unable to secure regular commercial financing, and lenders will be banned from requesting personal guarantees on loans under £250,000. The chair of the House of Commons business, energy and industrial strategy committee, Rachel Reeves, wrote to the chancellor at the end of March expressing the committee’s concerns about the way the scheme was being rolled out.
The government has approved more than £90m of loans to nearly 1,000 SMEs under the scheme since its launch in March. However, according to the latest survey carried out by the British Chambers of Commerce (BCC) at the beginning of April, just 1% of firms had successfully accessed CBILS and 7% are receiving grants. While there is a high level of awareness of the government’s support schemes among businesses, the BCC suggests this is not translating into firms successfully accessing the schemes.
The new coronavirus large business interruption loan scheme (CLBILS), will provide a government guarantee of 80% to enable banks to make loans of up to £25m to firms with an annual turnover of between £45m and £500m. The CBILS only covers SMEs with a turnover of up to £45m. The CLBILS is not yet available but is expected to launch before the end of April.
Guidance on job retention scheme (JRS): On 4 April, the government updated its guidance on the JRS, expanding and clarifying a number of points in the version first issued on 26 March, following the original announcement on 20 March.
The scheme will provide a grant to cover 80% of the regular wage costs of ‘furloughed’ employees up to a maximum of £2,500 per month, plus the associated employer NICs and minimum automatic enrolment employer pension contributions.
The updated guidance specifically confirms that individuals can be furloughed if they are ‘shielding’ in line with public health guidelines, cannot work from home and would otherwise be made redundant. Individuals with Covid-19 related caring responsibilities, such as childcare due to school closures, may also be furloughed.
Claims can be made for furloughed employees that were on the PAYE payroll on or before 19 March 2020 and which were notified to HMRC on an RTI submission on or before 19 March 2020. Employees that were employed as of 28 February 2020 and on payroll and were made redundant or stopped working for the employer after that and prior to 19 March 2020, can also qualify for the scheme if the employer re-employs them and puts them on furlough.
More information is given on those individuals who are not employees, but for whom the grant can be claimed if they are paid via PAYE. These include: office holders (including company directors); salaried members of LLPs; agency workers (including those employed by umbrella companies); and ‘limb (b)’ workers (workers who are not also employees under Employment Rights Act 1996 s 230).
HMRC has confirmed it intends to launch its online service for making claims under CJRS on 20 April. In a letter being issued to agents, HMRC explains that businesses and agents authorised to act on their behalf for PAYE matters will be able to claim. For reasons of data protection, file-only agents, including payroll bureaux, will not be able access the service.
At a hearing before the Commons Treasury committee on 8 April, HMRC chief executive, Jim Harra, announced the setting-up of an online ‘whistleblower’ service workers can use to report employers who abuse the job retention scheme. HMRC will be on the lookout for employers who claim grants while asking ‘furloughed’ staff to carry on working. The department will be able to audit claims retrospectively and prosecute fraud.
The CIOT’s low incomes tax reform group (LITRG) welcomed the move, describing the setting up of a reporting facility before any grants are paid as a ‘vital safeguard’.
‘We await further details from HMRC to help us get the message out to workers that the hotline exists’, commented Victoria Todd, head of the LITRG.
The government has consolidated its guidance on support for businesses affected by Covid-19 at its coronavirus business support pages on the Gov.uk website. The Law Society has also published guidance and FAQs for law firms.
State aid approval: The European Commission has given state aid approval for these types of schemes under its temporary framework agreed for the Covid-19 outbreak.
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