This week has seen a lot of announcements from the government but there is often a lack of clarity. Precise and definite information is taking time to come out. We can understand this because of the number of changes and initiatives being announced. Undoubtedly clarification will be issued in due course but it does mean that we cannot be as precise with advice and guidance as we would like.
As we find out more – and we are asking – we will publish that information. Please keep an eye on our website – www.centralbusiness.co.uk – and our Facebook page for information. Where appropriate we will contact individual clients.
Some announcements were made on Friday which are relevant to many clients:
Anyone due to pay VAT between now and 30 June will have the payment deferred and allowed until the end of the 2020/21 tax year (5 April 2021) to catch up. The announcement says that deferral will be automatic but (although we perhaps shouldn’t say this) it might be prudent to cancel any direct debits set up to automatically pay HMRC.
Self-Assessment Payments on Account Deferred
Income Tax payments on account due by 31 July 2020 will be deferred until 31 January 2021.
Welcome as these announcements were, most of the people we’ve spoken to over the last few days have said they had no intention of making these payments so, maybe, this is an acknowledgement of what was going to happen in any case.
80% wages reimbursement
The big announcement was the 80% reimbursement of wages. This sounds as if it might be helpful, but more clarification is needed.
At this stage, we don’t have full details of how the scheme will actually work or how to apply for and, more importantly, get the money. It is pretty certain that payments under this scheme will not be made before the end of April.
HMRC will be publishing more detail in due course – hopefully pretty quickly. We will keep you informed as and when we hear anything and we will, of course, help you make the claim.
What we do know is that changing the status of an employee will still be dependent on the employee’s employment contract.
Receiving an 80% subsidy may be better than having to pay notice pay (up to 12 weeks) and possibly redundancy pay. It also may mean that staff you have nurtured and trained can be retained.
There are a lot of queries and issues and we expect further announcements over the coming days.
For example, we have clients which have already agreed reductions in hours. Rather than put all staff on 50% hours, on the face of it, they may be better off putting 50% on “furlough” and not reducing the hours of the other 50%. This does seem unfair and we are sure it will be queried and (hopefully) addressed over the coming days.
Following on from the above, if an employee is working two days in a week, can the remaining three days be treated as “furlough” – ie an “intermittent furlough”.
The government website is being regularly updated and you can always check this out – Government website
We want to keep businesses afloat and viable, particularly our clients. The coronavirus created problems will eventually go away. We don’t know when but those businesses which have taken time to plan and prepare will have a head start on others. Let us help you prepare for the good times.
Even if you aren’t currently a client, don’t hesitate to contact us to ask questions. We will try to help but, as you will appreciate, existing clients will be receive preference.
Contact us on (01509) 816150 or use the form below.