Coronavirus Job Retention Scheme (CJRS)

Childcare

Since our last briefing the country has gone into national lockdown and the majority of children are being home schooled. This has caused parents to need to stay at home and request to be furloughed from their employment. There is no right to insist on being furloughed because of childcare issues.

HMRC have updated their guidance to make it clear that childcare is a reason for an employee to be put on furlough. It remains down to the Employer whether they choose to furlough their staff for this reason.

HMRC guidance says that you are eligible for furlough if you are ‘caring for children who are at home as a result of school and childcare facilities closing’.

The employee must agree to be furloughed as this represents a variation in their employment contract and they must not engage in any business income generating activity for their employer while on furlough. Flexi – furlough, i.e. reduced hours still remains an option under the scheme if this is viable for both parties and agreed in advance.

Holidays 

With many holiday year ends coming to an end at 31 March 2021, it might be worth considering whether furloughed staff are asked to take some annual leave in order for this not to be carried forward into a hopefully more normal year. CJRS and its link to holiday

A worker continues to accrue holiday entitlement whether they are on sick leave, parental leave or even furlough. During a period of furlough pay, an employer can insist that a worker takes holiday provided a notice period of double the amount of time they wish the worker to take off as holiday has been given. Without disrupting a period of furlough as an employer you can give notice that a worker must take holiday, however the furlough pay (currently 80%) must be topped up to normal pay and the difference in cost must be met by the Employer. With the rates that can be reclaimed set to reduce over the coming months it might be worth considering workers taking some of their annual leave before the end of June in order to get the maximum contribution towards the payment of it.

It is worth thinking about how much holiday furloughed workers will have accrued and need to take off once they return from furlough. This may cause enormous problems if several workers all have holiday they need to take within a smaller window. It has been announced that Employers must allow the holiday to be carried forward into future holiday years if certain factors are met.

Lockdown grants for retail and hospitality firms

One off grants of up to £9,000 per property were announced last week to support the retail, hospitality and leisure sectors. These grants are expected to last until the end of February and should benefit more than 600,000 businesses. The grants, are provided on a per-property basis and will range from £4,000 for businesses with a rateable value of up to £15,000, to £9,000 for rateable values of over £51,000.

A further £594m is being made available for Local Authorities to support other businesses not eligible for the grants that might be affected by the restrictions.

Self Assessment

The deadline for submission for personal tax returns as previously notified in a prior briefing remains 31 January 2021, but penalties for late returns which can be attributed to the COVID pandemic can be appealed.

HMRC appreciate that the payment of tax for many on 31 January 2021 may be difficult. Many people will have deferred their payment on account from July 2020 and this would automatically become due on 31 January 2021 as well. If your payment is less than £30,000 you can set up a payment plan online using your Government Gateway account without the need to call HMRC, however interest will be charged. If the liability is more than £30,000 you will need to contact HMRC to discuss a time to pay arrangement.

Self Employed Income Support Scheme

The third grant must be claimed by 29 January 2021 if you can prove a ‘a new or continuing impact from coronavirus between 1 November 2020 and 29 January 2021, which you reasonably believe will have a significant reduction in your profits’ . There are some examples on HMRC website of what this means. https://www.gov.uk/guidance/how-your-trading-conditions-affect-your-eligibility-for-the-self-employment-income-support-scheme#examples

The fourth grant will cover February 2021 to April 2021 and details of this will be released in due course.

Bounce Back/Coronavirus Business Interruption Loans

These are still available, the date for when you need to apply has been extended to 31 March 2021 for either a new claim or a top up from an original loan.