COVID-19 Business Update 22/03/2020

This email is part of a regular update I send out to businesses in Scunthorpe. If you have not received this email directly from me please click here to subscribe to my COVID-19 Business newsletter.  

Update - 22/03/2020  

I know that there are a lot of concerns for those who are self-employed, I have been working with my colleagues to address the self-employed “gap” that a lot of people I know (including family members!) have fallen through. Whilst there are VAT and Income tax deferrals and some universal credit support for the self-employed it is simply not enough. 

We (MPs) have put a lot of pressure on the Government to act - from what I know they are aware of the issue and are working on it. I am hopeful that we will be seeing an update later this week. I know it’s difficult but please hold on whilst we do our absolute best to sort this out. As usual, I will keep you updated. 

For those who are employers, I have promised to pass on details regarding the Government's Coronavirus Job Retention Scheme. Hopefully, with this scheme in place, you will not have to lay off any employees.
 

From the updated GOV.uk support for businesses page

Guidance for employers regarding furloughs/ the Coronavirus Job Retention Scheme: 

How to access the scheme

You will need to:

  • designate affected employees as ‘furloughed workers,’ and notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.

 

From the updated Gov.uk support for employees page: 

Guidance for Furloughed employees:

Furloughed workers

If your employer cannot cover staff costs due to COVID-19, they may be able to access support to continue paying part of your wage, to avoid redundancies.

If your employer intends to access the Coronavirus Job Retention Scheme, they will discuss with you becoming classified as a furloughed worker. This would mean that you are kept on your employer’s payroll, rather than being laid off.

To qualify for this scheme, you should not undertake work for them while you are furloughed. This will allow your employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month.

You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to.

If your salary is reduced as a result of these changes, you may be eligible for support through the welfare system, including Universal Credit.

We intend for the Coronavirus Job Retention Scheme to run for at least 3 months from 1 March 2020, but will extend if necessary.
 

Hopefully, this will be helpful as you may be having conversations with your employees this week. Please do not hesitate to reach out if there is anything I can help with. 

 

Yours sincerely,

Holly

Update - 20/03/2020 (part 2) 

My apologies for the late email.

I have now recieved additional information from the Chancellor which can be read here. The Ministry of Housing, Communities, and Local Government also provided an updated letter regarding their guidance on "social distancing" (this is important if you are operating a pub or a restaurant) which can be read here. 

From the Chancellor's letter:

Coronavirus Job Retention Scheme

Today I have announced a UK-wide scheme to pay a grant to any business for each worker they identify as furloughed. A furloughed worker would remain employed by the business but would not undertake any work or be expected to be available for work.

This is to support forms who would otherwise be faced with no choice but to make these workers redundant or ask them to take a period of unpaid leave. Any UK employer with a PAYE scheme, who promises to retain these staff even though they won’t be doing any work for the employer, will be eligible to apply directly to HMRC for a grant under this scheme. These grants will cover 80% of the salary of retained workers up to a total of £2,500 a month – more than the median monthly earnings. We will look to have this scheme available as quickly as possible, aiming to get it done before the end of April. This will be available for at least the next three months, but we will keep it available for as long as is needed.

However, we realise firms need cash now so will be deferring tax payments, as covered below. The principle, which I have discussed with the TUC and Business Representative Organisations, is of sharing the burden between firms, workers and the government. While that means workers will see a reduction in pay, they will keep their jobs, and while firms will still have some costs, they will keep their workforce, ready to bounce back from this crisis.

Further information and details of the scheme will be shared in due course.

There are also more details regarding VAT and Income Tax Self-Assessment, Universal Credit (UC) Standard Allowance and Working Tax Credit (WTC) Basic Element, and other policies announced today that you can read from his letter. I appreciate that there is still a gap of information which I will strive to provide you once I have received them.

I also understand from correspondences with my colleagues that the Government is to announce further measures to support self-employed persons in the upcoming days.

I hope that the information above will aid your deliberations over the weekend. 

Have a great weekend and stay safe,
Holly