New Furlough Scheme Extension
The Chancellor has announced that the Furlough scheme will be extended until the end of March‌‌‌ 2021 for all parts of the UK. 
For claim periods running to 31‌‌‌ January 2021, the UK Government will pay 80% of employees’ usual wages for hours not worked, up to a cap of £2,500 per month. The UK Government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.

It was also confirmed that the Job Retention Bonus will no longer be paid in Fe‌‌‌bruary 2021, as CJRS will be available at that time. An alternative retention incentive will be put in place at the appropriate time.
What you need to do now

If you intend to claim under the Furlough scheme, please look at information published on how you can check if you’re eligible to claim, and what you need to agree with your employees. You can find this the GOV‌‌‌.UK website by clicking here. If we process your payroll please contact to let us know if you need us to make a claim.

The full guidance for claims from November onwards, including more information on how to calculate a claim, will be published on GOV‌‌‌.UK on Tuesday 10th November. Claims can be made from 11th‌‌‌ November 2020.
Continued Support for the Self-Employed

Millions of self-employed people are to benefit from the continued support scheme. 

Also - don't forget that you only have until 19 October 2020 to claim the second grant.

Last week it was announced that there will be a grant extension for self-employed individuals and partnerships.

Who can claim
To be eligible for the grant extension self-employed individuals, including members of partnerships, must:
  • currently be eligible for the the Self-Employment Income Support Scheme (although they do not have to have claimed the previous grants)
  • declare that they are currently actively trading and intend to continue to trade
  • declare that they are impacted by reduced demand due to coronavirus in the qualifying period (the qualifying period for the grant extension is between 1 November and the date of claim)
What the grant extension covers
The extension will provide two grants and will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period.

The first grant will cover a three-month period from the start of November until the end of January. HMRC will provide a taxable grant covering 20 per cent of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £1,875 in total.

HMRC are providing broadly the same level of support for the self-employed as is being provided for employees through the Job Support scheme.

The second grant will cover a three-month period from the start of February until the end of April. HMRC will review the level of the second grant and set this in due course.

The grants are subject to Income Tax and National Insurance Contributions.
How to claim
HMRC will provide full details about claiming and applications in guidance on GOV.UK in due course.
Job Support Scheme
If you are still affected by COVID-19 and have employees, then please read the following information.  
The Job Support Scheme will be introduced from ‌‌1‌‌ November to protect jobs where businesses are facing lower demand over the winter months due to coronavirus (COVID-19). 

Under the scheme, which will run for six months, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand. 

You will continue to pay the wages for the hours your staff work. For the hours not worked, you and the government will each pay one third of their usual wages (capped at £697.92 per month). You will need to meet your share of the pay for unworked hours and all your National Insurance contributions and statutory pension contributions, from your own funds. This means that employees will receive at least two thirds of their usual wages for the hours not worked. 
To be eligible, employees must:  
  • be registered on your PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment in respect of that employee must have been made to HMRC on or before 23 September 2020
  • work at least 33% of their usual hours. The government will consider whether to increase this minimum hours threshold after the first three months of the scheme. 
The Job Support Scheme will be open to employers across the UK even if you have not previously applied under the Coronavirus Job Retention Scheme (CJRS) which closes on 3‌1‌‌ ‌‌October.

The Job Support Scheme will start from 1‌‌ November and you will be able to claim in December. Grants will be paid on a monthly basis.  

The scheme will operate in addition to the Job Retention Bonus. You and your employees can benefit from both schemes in order to help protect viable jobs. 

For information on what is covered by the grant, which employers and employees are eligible, and how to claim, search 'Job Support Scheme factsheet' on GOV‌.UK.
HMRC Letters Cause Concern
Many employers are receiving letters from HMRC claiming that their CJRS claims are incorrect. The letters are alarming as they don’t explain the error or state which month’s Coronavirus Job Retention Scheme claim is involved.

HMRC states that 5% - 10% of claims are believed to be incorrect and therefore those claims have been made illegally. It estimates the value of these mistakes and fraudulent claims to be £1.75bn - £3.5bn, which is likely to involve a large number of smaller errors spread across many claims. Holiday pay and entitlement was a particular area of confusion for many people, for example.

HMRC confirms that it will focus on fraudulent claims rather than innocent errors. However the lack of detail given within its letters to employers is causing alarm. Accountingweb reports that: “The HMRC compliance letter says the employer’s CJRS claim appears to be incorrect because, for example, ineligible employees were included, or too much was claimed for some other reason. No details are given of how much the overclaim may be or who the potential ineligible employees are. The HMRC letter doesn’t even detail which CJRS claim the employer has submitted that is suspected of being incorrect.”

HMRC’s proactive steps to combat fraudulent CJRS claims have already resulted in police action. An accountant and company director were detained on 10 September on a suspected £70,000 case of CJRS fraud.

If you receive a compliance letter from HMRC and you believe your claim to be correct, you are asked to contact HMRC by telephone. An officer from HMRC is assigned to your case ready for when your CJRS investigation is progressed. It is anticipated that the processing system will not be available for some weeks. The inevitable delay between receiving the letter, being assigned a contact by HMRC and the subsequent processing will be additionally stressful for many people.

Should you believe that your claim is incorrect, you are asked to contact HMRC by email and then given instructions for providing a formal disclosure. However there is time to make a voluntary correction of earlier CJRS claims. Also, excess grants can be corrected without penalty within 90 days of receiving the grant or by 20 October 2020 (whichever is the later date).

Please remember to contact us if you receive a compliance letter from HMRC. We’re here to help.

Get in touch - If you'd like to find out more about how we can help you and your business pay less tax, generate more profits and create long-term wealth for you and your family, please get in touch now