A quick update on the operation of the Coronavirus Job Retention Scheme (CJRS) previously opined on (see our blog xxx). HM Treasury has announced directions on the modification of the scheme effective i.e. the cut-off date for making a claim under the original scheme I s 31 July 2020.
As such, employers will be able to participate in the original scheme only if a claim had been made under the original scheme and the employee must have been on furlough for at least 3 weeks from a date on or before 10 June 2020. For further information on the operation of the new scheme, qualification for participation and key dates to be aware of clickhere.
On 12 May, the Chancellor announced changes to the operation of the Coronavirus Job Retention Scheme (CJRS) and set out details on how the scheme will operate as people return to work. The good news is the scheme will continue in its current form until August. The not so good news: from September, the amount of the grant to employers will be tapered to reflect employees returning to work.
Initially, employers will be required to pay their employees’ National Insurance and pension contributions with the government paying 70% of wages up to a cap of £2,187.50 and employers will contribute 10% of wages to make up the 80% total up to a cap of £2,500. Then, from October, the government’s
contribution will be reduced to 60% of wages up to a cap of £1,875 with employers required to pay the remaining 20%.
The revised scheme includes an announcement that new entrants to the scheme will need to have been furloughed for at least three weeks prior to 1 July i.e. those employees who on 30 June had been on furlough at least three weeks under the existing scheme. The CJRS is currently scheduled to close at the end of October.
Workers eligible under the self-employment income support scheme will be able to claim a second and final grant in August. The grant will be worth 70% of their average monthly trading profits paid in a single instalment covering three months’ worth of profits and capped at £6,570.
HMRC has shot yet another salvo across the bows of employers claiming grants under the government’s Coronavirus Job Retention Scheme (CJRS), by announcing an increase in the number of reports it has received regarding potentially fraudulent claims. Apparently, at the date of this piece, the new number is 1,868 up by 1,073 from the original number announced on 12 May 2020.
A word to the wise: the fact that HMRC has made two announcements in less than four weeks on the number of reports received is indicative of a potential launch of investigations into to the receipt of CJRS grants by some employers. The problem with this lies with the potential for making of anonymous reports by disgruntled employees whose actions could cause unnecessary interventions by HMRC with costs being incurred either by way of disruption to business or the cost of engaging profession representation.
HMRC has advised that whilst it is currently reviewing the information received before taking any action, it will continue to encourage employees to report perceived abuses of the scheme via it’s portal on the.GOV website. Examples of abuse include where an employer claims a grant but does not pay this to the employee(s). using the grant to fund a redundancy payment, making employees work whilst on furlough or asking them to work while on furlough.
Naming fraudulent companies and directors.
Requesting repayment of monies claimed and possible penalties
Criminal investigation and prosecution under the Fraud Act 2006
As anyone who has had dealings with HMRC’s investigation officers, just proving your innocence can be a challenge once an enquiry has commenced, so do not hesitate to seek professional assistance if required.
HMRC has announced new fuel rates for company cars. They apply to all journeys on or after 1 June 2020, until further notice. For one month from the date of the change, employers may use either the previous or new rates.
Interesting article on another one of the government’s initiative to ensure the cashflow of small businesses do not dry up #bouncebackloans. Confirms my personal suspicions on the future direction of this government initiative to help #smallbusiness cope with the anticipated damage the #coronavirus#lockdown will have on SMEs.
The shocking part of the article, if, as the article states, anecdotal evidence suggests, is the allegation that up to 50% of business owners interviewed are taking out loans knowing they’ve no intention of paying it back.
An in depth discourse into the nuances of the impact of #covid19 and #HMRC‘s statutory residents test (SRT) on #globalmobility staff and individuals delayed in the UK following #lockdown. A definite must read for both professionals and individuals affected.
With the outbreak of COVID-19 and the UK government’s compulsory lockdown of the economy in March this year, thousands of employers have been forced to embrace the wonders of modern technology and equip their employees for compliance with the mantra “Stay at home, Save the NHS”.
In a world in which the majority of employees have had little choice but to spend their working week either battling with poor running over crowded trains or congested city roads and clogged motorways, the lockdown would have been a welcomed respite for some and a nightmare for others.
Etiquette on the conduct of remote hearings during the current lockdown has necessitated the need for the President of the Employment Appeal Tribunal to revisit the rules. In an announcement made today, 12 June 2020, with immediate effect, paragraph 19 of the 2018 Practice Direction is amended to cover the following;
· Procedure where a judge sits with one lay member;
· Guidance on how partial and full remote hearing will be conducted; and·
· A ban on the recording by either party of the remote hearing
For full details of the changes, click here for a link to the full details of Practice Direction (Employment Appeal Tribunal – Procedure – Hearings) 2020
The following update is for those employers who are not clear on the status of the receipt from HMRC of grants in respect of the furlough of employees during the lockdown. These payments are made under the Coronavirus Job Retention Scheme (CJRS), the Self Employment Income Support Scheme (SEISS) and other business supporting schemes.
For the avoidance of doubt, the grants are taxable. They will be treated as the receipt of income by the business which for a limited company will be subject to Corporation Tax and if paid to a sole trader, partnership or Limited Liability Partnership (LLP) will be taxed as income on the individual sole trader, partners and LLP members as profits from trading activities.
For further information on the tax implications of the receipt of COVID-19 support, see:
A word of caution: the legislation give HMRC powers to recover payments to recipients where these was no entitlement to either SEISS or the CJRS schemes or when an employer fails to use a grant to pay employees, makes pension contributions, or pay PAYE or National Insurance contributions. These powers will include the raising by HMRC of income tax assessments or requiring taxpayers to submit a self-assessment tax return declaring the sum of the grants received. HMRC will also have the power to levy a penalty charge in cases where deliberate non-compliance is established.
For further information on the tax implications of the receipt of COVID-19 support, see:
To resolve a number of burning on the subject of the taxation of an employee’s company car during the period of the lockdown, HMRC has finally clarified its position with regards to the impact of ‘availability’ and the issues surrounding salary sacrifice scheme.The article should prove to be useful guidance for both employer and employee on the potential for mitigating the Class 1A NICs for the employer and the #benefitinkind tax charge for employees.
A useful write up on potential #employment claims for#expenses incurred #workingfromhome from during the #lockdown.Do read the small print carefully before diving into making a claim – or have a chat with your friendly #nexalaw solicitor. Always happy to chat.
A good read about using Alternative Dispute Resolution as a viable option to litigating disputes with HMRC.
The important thing to note is that whilst mediation is currently optional, this route may be come a necessary one in line with the ongoing streamlining of tax tribunal cases – and its cost effectiveness when compared the cost of a full hearing before a tax judge.
