Member News

The UK’s largest network of small business specialist accountants ensures its franchisees continue to lead the way.

The TaxAssist Accountants network, which looks after over 76,000 independent businesses across the UK, is proud to be delivering expert advice, tools and guidance to help support this vital sector through these difficult times.

Realising accountants would play an intrinsic part in helping to explain the many support measures rolled out by the Government, the TaxAssist Support Centre has ensured every franchisee has the resources they need to effectively communicate with and assist their clients.

Daren Moore, Group Commercial Director at TaxAssist Accountants, explains: “Very early on, we recognised we needed to set up a dedicated TaxAssist COVID-19 Action Group. “It produces a daily news update to each franchisee, highlighting the latest announcements and examining the finer detail of the Government’s help measures.

“Feedback received from the network has been fantastic so far, with many praising our pro-active approach and our depth and quality of resources, which has allowed them to offer an enhanced service to their clients, who are desperately looking to them for clarity and guidance. We have also written a letter on behalf of our network, urging the Chancellor of the Exchequer to reconsider some of the measures he has put in place to support certain sectors, and attended a virtual meeting with the Small Business Commissioner at the Department of Business and Industry, where we represented the views of our network.”

TaxAssist Accountants has developed a Coronavirus Hub on its website, containing all of the latest information about what support has been made available. This has been designed to be a comprehensive guide, covering summarised advice by client type, such as businesses, employers, Directors, self-employed and landlords. Analysis reveals visitors to the website more than doubled compared to this time last year, as clients eagerly check on the latest developments.       

“Our franchisees have reported that they have been inundated with queries and have been incredibly busy helping and reassuring their clients. In turn, the Support Centre Technical Helpdesk Staff (all now working from home), have recorded a record number of calls from franchisees accessing our team of specialists,” said Daren.

“All of our accountants have access to the very latest in accounting and office software, which has paid dividends in being able to remain open for business, offering telephone or video consultations for all existing or new clients, and the ability to provide live data and reporting for clients in need of urgent cashflow projections.

“We have helped franchisees produce videos to enable them to engage with their clients and we have produced videos about the support and grants available, as well as running a series of webinars for both franchisees and clients, covering the latest position and practical guidance.”

A major strength of the TaxAssist model is the ability to support its franchisees with a centralised mailing system and social media campaigns. This means every client can be contacted quickly and professionally with the very latest developments relevant to them, a big boon for a busy network of accountants, with more than 400,000 emails sent on their behalf to date and regular posts and client guides shared on social media.

Lloyd Evans, who owns TaxAssist Accountants practices in Kingswinford, Wolverhampton and Halesowen, said: “The constant messages we receive from clients is one of thanks for the regular updates they receive, which they greatly value. These communications bring us ever closer to our clients and supports the huge volume of telephone calls we are all making at this time.”

 If you would like to contact TaxAssist Accountants to request an online chat with one of our Accountants, please call 0800 05 23 555 to discuss your needs.

If you are interested in joining the network of TaxAssist Accountants, we are holding a Virtual Discovery Day on the 21st April – please call 0800 0188297 for more information.

Norfolk and Waveney cancer charity, Big C, is encouraging local people affected by cancer to access community-based support during the Coronavirus outbreak.

Dr Melanie Pascale, Director of Charitable Operations at Big C, said, “Getting the right support when either you, or a loved one, is facing cancer, which is very difficult at any time, is particularly crucial now when so many are socially isolating or for the most vulnerable, shielding at home completely. Many are also experiencing increased anxiety due to changes in their care and treatment plans. “Since the beginning of the outbreak our support team has made telephone contact with hundreds of Big C service-users to check on their health and wellbeing. 800 people have also accessed support via our online support centre since we closed our centres due to the outbreak. With 25,000 visits to our centres across Norfolk usually taking place each year, we know how many people will currently be needing our support and we’re keen to raise awareness of the services we can continue to offer, albeit in a different way in some cases. You don’t need to have used Big C services previously, we are here for everyone living with cancer.” Tim Adams, who has been supported by Big C in recent weeks, said “I am absolutely overwhelmed by the continuous support that I have received so far through phone counselling and regular telephone calls of support. Thanks so much also for the bag of incredibly useful items delivered to my home earlier on this week. It was such a kind thought and a lovely surprise.” Another Big C service user, Rodney Earp, said “I took my bag of Big C goodies to my allotment and whilst I planted my Casablanca 1st early potatoes, I was overcome with the kindness of the team in packing these items for me. I could use everything, and I felt as though you were there with me at this time when we can’t meet. I can only thank you with all my heart.” Big C has launched a range of services designed to support those affected by cancer during the Coronavirus outbreak which include:

• Free telephone support line operated by cancer specialist nurses and qualified, experienced cancer information officers. Telephone 0800 092 7640, Monday to Friday 9am to 5pm.
• Live chat facility Monday to Friday 11am to 3pm
• Telephone counselling
• Telephone advice in partnership with Citizens Advice Bureau
• Big C Virtual Centre – offering ‘Ask the Nurse’ support and video links to Big C team members. Physical activity and mental wellbeing videos
• Delivery of Big C welfare support packs, including hand sanitisers made by UEA scientists for the charity
• Emergency delivery service for those most in need
• Weekly wellbeing blogs from Big C nursing and information support staff

  Dr Melanie Pascale added, “Please do get in touch with Big C on 0800 092 7640 and we will be very happy to discuss how we can support you.” www.big-c.co.uk

Great Yarmouth Borough Council has already handed out nearly £20m in Government relief grants to local businesses – and is reminding those eligible businesses which have not yet claimed their money to complete the online form.

Three weeks ago, the council wrote to the 3,000 eligible businesses in the borough and asked them to complete the simple online form as swiftly as possible in order to get their grants paid out.

So far, around £19m has been handed out in total to 1,722 businesses, which represents 57 per cent of the businesses in the borough that are eligible for the Government grants.

With the number of forms completed daily now starting to reduce, the council is phoning or emailing the remaining eligible businesses, where it has those contact details, to remind them of the importance of completing the online form.

Visit www.great-yarmouth.gov.uk/coronavirus-business-support for the link to the online form, information and support about the grants, eligibility criteria and further business advice. For advice relating to the grants, call 0808 196 2240. For other business advice, contact the Growth Hub via 0300 333 6536 or www.newangliagrowthhub.co.uk

Eligible businesses should only submit one form, as duplication of forms is likely to delay processing. The council is also reminding businesses to be wary of third-party companies offering to complete their grant form for a fee, as the form can be completed simply by businesses themselves.

Cllr Carl Smith, leader of the council, said: “The council is working closely with New Anglia LEP, other local councils and business groups to ensure our local businesses get the support they are entitled to during these challenging times.

“I would like to praise our council staff for working quickly to get so many grants paid out in just three weeks, and we continue to pay out money daily. We would like to hand out grants to the remaining eligible businesses but can only do so if those businesses complete the online form. 

“The form is a simple data-capture process asking for information each business should have easy access to, and council staff are available to help over the phone if needed. We are doing all we can to make businesses aware, in liaison with our partners, and we hope eligible businesses will grasp the support being provided.”

How can we make better working environments for everyone, post Covid-19? Our aim is to investigate the best ways in which to improve our working lives, in order to promote better mental and physical health. We think that now is an especially important time to make these considerations, as we begin to prepare for normal life to resume once the outbreak is over. Why not try to improve our workplace environments, instead of simply picking up where we left off? We have created a short survey to gain valuable insights into how remote working is affecting individuals across the country. This will form the basis for more in-depth design studies into space planning, employee requirements, furniture specification and how we can benefit both the employees and employers in the future. This short survey should only take around 5 minutes of your time. The questions are a combination of multiple choice and written answers, all about your usual working environments both before and during the outbreak of Coronavirus.

Survey: https://surveyhero.com/c/374b093d

For more information on this survey and further study please visit – www.layrddesign.co.uk/workspacereview

Take Care.

Norwich City Council know that this is an incredibly difficult time for small businesses in the city, and they want to do everything they can as quickly as possible to support them and help with cashflow problems.

Nearly 800 Norwich businesses have now received their government grants, equating to nearly £14 million, which is over a third of the allocated funding and more are being processed daily. By the end of the week ending 17 April, they will have paid out 40 per cent of their funding. They are on track to meet the government target of paying out all business grants by the end of April.

Allocating funding quickly is essential and they’re working flat out to do this, but they have to strike a balance between speed and accuracy.

Of course for the businesses still waiting for grants this is incredibly frustrating. Please be assured that if you’ve filled in an online small grants form, Norwich City Council have that form, and will contact you directly if there is a problem or if they need any more information to process the payment.

If you’ve not yet filled in a small grants form, please do so here.

They understand that there are frustrations with the lack of contact from the council to individual businesses about the status of their grant. This is a brand new process for them which they had to roll out really quickly and they are prioritising processing grants, so please bear with them.

Norwich City Council have prepared some FAQs, which hopefully answer some questions you may have.

Take this time to upskill or refresh you or your staff’s training – it really is the perfect time!

The RedCat Partnership Ltd are a long established professional Health and Safety Consultancy and Training business based at their own premises at No8 Thorpe Road, Norwich 

We have created an awesome set of blended courses which are a mixture of live interactive webinars, plus some self directed learning!

We offer a suite of accredited compliance based training courses, but also bespoke course!

Do get in touch to book! 

MHA Larking Gowen has been working on numerous blogs, brochures and videos to give businesses the latest advice on the ever-changing COVID-19 pandemic. 

We have specialist sector teams in Tourism, Leisure and Hospitality, Not for Profit, Medical, and Farms and Landed Estates, as well as specialists in Tax, Payroll, Corporate Finances, Insolvency and Business Advisory. Our teams are commited to helping where they can with advice and support, so please get in touch at enquiry@larking-gowen.co.uk or visit our dedicated COVID-19 Hub.

  Watch our latest videos, including a ‘top 10 tips’ series    Business Advisory Partners, James Lay and Mark Curtis, have filmed some brief videos on disaster planning, problem solving, decision making and business prioritising. They have also filmed a series of short videos giving you the top 10 business tips designed to help you problem solve, prioritise and keep calm. These are tried and tested methods and are beneficial to most businesses as we navigate through these uncertain times   COVID-19: Current Business Support   You can download our Current Business Support document from our COVID-19 Hub which outlines the current business support measures issued by the Government, and includes information on who is expected to be eligible for the reliefs. To help you identify which schemes are actually beneficial to you, we have produced a flow chart – What financial support is there for me and my business?   Read the latest blogs and helpsheets from our experts   Our experts are keeping up to date with the guidance as it is released, and our blogs and helpsheets cover a wide range of topics such as How to manage COVID-19 anxiety to What you can do if you’ve made capitol losses in the 2019/2020 tax year. You can view a full list of all resources on our COVID-19 hub.

The Chancellor, Rishi Sunak, has unveiled a set of financial measures to support businesses through this period of disruption caused by COVID-19, which includes the latest rescue packages for employed and self-employed workers.

A summary of the measures to support business include:

Coronavirus Job Retention Scheme On 20 March 2020, the Chancellor announced a rescue package for businesses and workers, by introducing a Coronavirus Job Retention Scheme (CJRS).

Under the new scheme, employers can contact HM Revenue & Customs (HMRC) to apply for a grant (not a loan) to cover up to 80% of furloughed workers’ salaries, up to £2,500 per month. Employers can choose to top up the salary of retained workers if they so choose.

Furloughed workers are workers that are to be retained but have been asked to take a temporary leave of absence. The employee should not undertake work whilst they are furloughed.

If you are to treat employees as furloughed workers, you will need to notify them of the change. Changing the employment status remains subject to existing employment law, depending on the employment contract, and may be subject to negotiation.

The grant will be backdated to 1 March 2020 and will initially be available up to a period of three months, however, this period may be extended by the government if required.

The first grants will be available in the coming weeks and by the end of April 2020 for all businesses.

Eligibility criteria: – All UK businesses are eligible – Available for employees on the payroll at 28 February 2020

Application process: – Designate affected employees as ‘furloughed workers’ and notify your employees of this change – The employer will pay the employee through payroll, using the Real Time Information (RTI) system as usual – Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal that is currently being developed by HMRC

Further information on how the scheme operates, calculating the grant amount and what you need to do to make a claim can be found here.

If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan (CBIL) – see below.

Self-Employment Income Support Scheme On 26 March 2020, the Chancellor announced the new Self-Employment Income Support Scheme (SEISS). The scheme will support self-employed individuals, including members of partnerships, who have lost income due to COVID-19.

Eligible recipients will be able to claim a taxable grant worth 80% of their trading profits, up to a maximum of £2,500 per month, available for 3 months in one lump-sum payment. This may be extended if needed.

Further information on the scheme eligibility and application process can be found here.

VAT Deferral It was also announced that VAT liabilities due for the period 20 March 2020 to 30 June 2020 will be deferred until the end of the 2020/21 tax year.

VAT refunds and reclaims will be paid by the government as normal.

More information can be found here

Eligibility criteria: – All UK businesses are eligible

Application process: – This is automatic with no applications required. – Customers who normally pay by direct debit may need to cancel their direct debit with their bank, if they are unable to pay. Please do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return.

Self-Assessment Income Tax Deferral Self-assessment payments, normally due 31 July 2020, will be deferred until 31 January 2021.

The deferment is optional. If you are still able to pay your second payment on account on 31 July you should do so.

No penalties or interest for late payment will be charged if you defer payment until January 2021.

Eligibility criteria: – You are eligible if you are due to pay your second self-assessment payment on account on 31 July. You do not need to be self-employed to be eligible for the deferment.

Application process: – This is automatic with no applications required.

Self-Employed – Universal Credit and Rental Costs Self-employed individuals will also be able to access, in full, Universal Credit at a rate equivalent to Statutory Sick Pay (SSP) for employees and a further £1bn to cover 30% of house rental costs.

Government Backed Loans From 23 March 2020, the government’s Coronavirus Business Interruption Loan Scheme (CBILS) went live, making available loans for small and medium sized businesses up to £5 million in value. The government will cover interest charges for the first twelve months, as well as any lender-levied fees.

The scheme provides the lender with a government backed guarantee against the outstanding facility balance, however, the borrower remains liable for the debt.

We have already been in contact with our local bank contacts and can assist in an application where appropriate.

The CBILS will be provided by the British Business Bank through participating providers, and will offer attractive terms for both businesses applying for new facilities and lenders.

Finance terms are available up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.

For further information, the British Business Bank have put together the following FAQ.

Further details regarding the CBILS, can be found here.

Eligibility criteria: – Be UK based, with turnover of no more than £45 million per annum – Have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable the business to trade out of any short-to-medium term difficulty. – Are not an excluded trade or organisation (eg banks, building societies, insurers and reinsurers – but not insurance brokers)

Application process: – The scheme is now open for applications. All major banks are offering this scheme. To apply, you should talk to your bank or one of the other participating providers. We can assist in an application where appropriate.

Business Rate Holiday For the 2020/21 tax year, business rates will be abolished for all retailers, leisure outlets and those in the hospitality sector. It was also announced that estate agents, lettings agencies and bingo halls will receive the business rate relief for 2020/21, along with qualifying nursery businesses.

Eligibility criteria: – Your business is based in England – Your business is in the retail, hospitality and/or leisure sector – Your business is an estates agent, lettings agency or bingo hall – Your business is a qualifying nursery

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

– as shops, restaurants, cafes, drinking establishments, cinemas and live music venues – for assembly and leisure – as hotels, guest & boarding premises and self-catering accommodation – as an estate agent, lettings agency or bingo hall – as a qualifying nursery

Application process: – Your local authority should apply the relief automatically to your 2020/21 business rates bill. This may have to be rebilled if you have already received it.

Grants For businesses in retail, leisure and hospitality sector operating from smaller premises, with a rateable value of between £15,000 and £51,000, you will be eligible for a grant of £25,000.

A grant of £10,000 is available for businesses with rateable value up to £15,000.

You can check your rateable value here.

Eligible recipients will receive one grant per property (hereditament).

If you are eligible for Small Business Rate Relief (SBRR) or Rural Rate Relief (RRR) then there is a one off grant of £10,000 available.

Eligibility criteria: – your business is based in England – your business is in the retail, hospitality and/or leisure sector with a rateable value less than £51,000; or – your business is eligible for Small Business Rate Relief (SBRR) or Rural Rate Relief (RRR)

Application process: – The grants will be available through your local authority, who will write to you if you are eligible for this grant. Details of the grant publication can be found here.

Businesses with a rateable value of £51,000 or over, or are not ratepayers in the business rate system, are not eligible for the grants.

Statutory Sick Pay (SSP) Small and medium sized businesses will be able to reclaim SSP up to two weeks per employee where their sickness has been because of COVID-19.

Eligibility criteria: – You businesses is UK based – Your business is a small or medium-sized and employs fewer than 250 employees as of 28 February 2020

Application process: – The mechanism of how businesses can claim this back will be published in the next couple of months, which we understand will be through a rebate scheme that is currently being developed.

SSP is due to be paid from the first day of sickness absence, rather than the fourth day, for people who have COVID-19 or have to self-isolate, in line with official government guidance. The measure applies retrospectively from 13 March 2020.

HM Revenue & Customs -Time to Pay Arrangements HMRC have set up a telephone helpline to support businesses and self-employed people concerned about not being able to pay their tax due to coronavirus (COVID-19).

On a case by case basis, HMRC have always looked at agreeing time to pay arrangements for Self-Assessment, Corporation Tax, PAYE and VAT liabilities. We have found them to be very amenable in the past and HMRC have increased the staff availability to meet demand.

For those who are unable to pay due to coronavirus, HMRC will discuss your specific circumstances to explore:

– agreeing an instalment arrangement – suspending debt collection proceedings – cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately

Eligibility criteria: – Pays tax to the UK government – Have outstanding tax liabilities

Application process: – Call the HMRC dedicated helpline number: 0800 0159 559

The above measures being implemented by the government are correct as at 26 March 2020, however, we understand more measures could be implemented dependant on the progress of the pandemic and the economic impact this has in the UK.

The following government website is a useful source of information and is being updated daily click here for updates.

Our HR team have also put together some COVID-19 FAQs for employers here.

If you would like further information, please do contact us.

We are currently residing in a period where many in society are feeling particularly vulnerable, whether this be due to the threat of potential ill health or financial insecurity. At points in time such as these criminals seek to take advantage by preying on the resultant fears and insecurities of individuals.

It is therefore important that you remain as vigilant as possible in spotting potential scams- especially given the seemingly apparent authenticity and realism a lot of these convey to unsuspecting targets. The clever and emotive nature of these campaigns can leave even the most scrupulous and diligent of individuals open to attack at the hands of scam-artists.

HMRC have recently published the following examples of what to look out for:

Email scams

Phishing emails which coerce individuals into disclosing personal details such as passwords or bank details have been received by some. These can often be under the guise of issuing a tax refund to ‘protect yourself against Covid-19’. It is important to scrutinise the legitimacy of emails as thoroughly as possible in order to spot fraudulent attempts.

These emails will often include spoof email addresses and disguise display names to convey legitimacy.

Rules about wrongful trading have been temporarily suspended to provide directors with a greater degree of comfort when taking difficult decisions during the COVID-19 crisis – but they must still demonstrate that they have acted reasonably, says Andrew Turner of Lovewell Blake.

Company directors facing difficult decisions during the coronavirus crisis have been handed a potential lifeline with the suspension, backdated to 1st March 2020, of wrongful trading provisions, which might otherwise have hampered their ability to take decisions to secure the future of their businesses.

The current wrongful trading provisions mean that company directors can face personal liability if they fail to take account of the impact on creditors in a situation where trade is continued, when the director knew, or should have concluded, that the company couldn’t reasonably avoid liquidation (or administration) and creditors wouldn’t be paid in full.

In effect the changes should enable companies to continue trading in the short term, beyond the point where we would normally be advising they should cease, with directors having greater confidence that using their best endeavours to continue trade should not result in them being exposed to personal liability should the company ultimately fail.

In the current situation, with much of the economy effectively on pause, many directors are wrestling with decisions to safeguard the future of their businesses, which might otherwise have fallen under the wrongful trading microscope under the regulations. The Government is keen that when we emerge from this crisis as much of the economy is still intact as possible, and this is the reason for the temporary relaxation of the provisions.

However, and this is important, the suspension of the wrongful trading provisions are not a blanket waiver; directors do not have a ‘get out of jail free’ card to protect themselves from the consequences of their decisions and actions.

They will have to be able to demonstrate that what they do during the crisis is reasonable, and would be most likely to promote the survival of their company. And existing laws on fraudulent trading, transactions defrauding creditors, and misfeasance still apply.

Directors facing difficult decisions have a greater need than ever to take professional advice to be in the best position of steering their businesses through the crisis, and in doing all that they can to minimise the risks of potential future action against them.

If you would like further information, please contact Andrew Turner.

Lovewell Blake – Coronavirus Job Retention Scheme and Furlough Workers – FAQ’s

Which employees are eligible under the Coronavirus Job Retention Scheme?

In order to be an eligible employee in line with the scheme, furloughed employees must have been on your PAYE payroll on 28 February 2020, and include:

• full-time employees • part-time employees • employees on agency contracts • employees on flexible or zero-hour contracts

Employees who commenced their employment with their employer after 28 February 2020 cannot be furloughed and claimed for in accordance with this scheme.

If an employee was made redundant, or they stopped working for you on or after 28 February 2020, you are able to re-employ them, put them on furlough and claim for their wages though the scheme.

As well as employees, the grant can be claimed for any of the following groups, if they are paid via PAYE:

• office holders (including company directors) • salaried members of Limited Liability Partnerships (LLPs) • agency workers (including those employed by umbrella companies) • limb (b) workers

The guidance sets out specific considerations for those individuals who are paid via PAYE, but who are not necessarily employees in employment law. Unless explicitly set out in the government guidance of this scheme, all other guidance is applicable to these cases, and should be followed.

How do I obtain agreement from employees to place them on a period of furlough leave?

Changing the status of an employee to a furloughed worker is a contractual variation and therefore agreement (via a written furlough worker agreement) should be sought from employees for this to happen, contracts cannot be amended unilaterally. Therefore, unless there is a relevant clause within the employee’s contract of employment to cover this situation (and in any event best practice would be to consult and obtain agreement), you would need to obtain an employee’s express written agreement to do so.

If your contract of employment does not have a specific lay off clause giving you the right to lay off employees with no pay then you will need to seek the agreement from employees to only pay 80% of their salary, if employees do not agree to this then you will have to pay 100% of their pay and claim back 80% through the CJRS. Where you are unable to obtain agreement, the other option is to consider starting a redundancy procedure.

If you have 20 or more employees that this would affect, keep in mind that you may have collective consultation obligations in the event of proposing to dismiss employees (this includes redundancies as well as dismissing and re-engaging for the purposes of varying a contract of employment).

Do I need to put anything in writing to an employee regarding the furlough leave period?

Employers should discuss with their employee regarding any proposal to place them on a period of furlough leave and look to seek their agreement to this.

To be eligible for the scheme employers should write to their employee confirming that they have been furloughed (and obtain their written agreement to this) and keep a record of this communication for a period of 5 years. We would therefore advise that a written furlough worker agreement is implemented, please contact the HR team if you would like a template.

Can my employee undertake any work whilst on a period of furlough leave?

An employee must not undertake work for or on behalf of your organisation. This includes providing services or generating revenue for the business, or any organisation linked or associated with your business.

The guidance states that if an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for this scheme and you will have to continue paying the employee through your payroll and pay their salary subject to the terms of the employment contract you agreed. For example, if you have placed an employee on a short time working arrangement and they continue to undertake this, then they would not be eligible as part of the scheme as they would still be undertaking work for the organisation.

How much of an employee’s pay can be claimed back from the Government in line with this scheme?

Employers can use a portal to claim for 80% of furloughed employees’ (employees on a leave of absence) usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.

You can claim for any regular payments you are obliged to pay your employees. This includes wages, past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips) and commission payments and non-cash payments should be excluded.

The reference salary should not include the cost of non-monetary benefits provided to employees, including taxable Benefits in Kind. Similarly, benefits provided through salary sacrifice schemes (including pension contributions) that reduce an employee’s taxable pay should also not be included in the reference salary. Where the employer provides benefits to furloughed employees, this should be in addition to the wages that must be paid under the terms of the Job Retention Scheme. If employers need to stop any contractual benefits during this time, then they should consider whether they have the relevant contractual right to do so within the employee’s contract of employment or seek agreement from employees. In these circumstances, we would advise seeking guidance on the process to follow.

Normally, an employee cannot switch freely out of a salary sacrifice scheme unless there is a life event. HMRC agrees that COVID-19 counts as a life event that could warrant changes to salary sacrifice arrangements, if the relevant employment contract is updated accordingly.

In order to make use of this scheme do I have to furlough all employees immediately?

You do not need to furlough all of your employees in order to make use of this scheme. When considering whether to furlough an individual it is important to consider whether or not the Company and their role have been significantly affected by Covid-19. The purpose of the scheme is to protect employees’ employment and to minimise/avoid organisations having to either lay off employees or to consider compulsory redundancies, as a result of the impact of Covid-19 on organisations.

Employers can use this scheme anytime during the period in which it is in place for, which is currently until 31 May 2020, although it may be extended.

Can I furlough an employee who is currently on sick leave or self isolating?

Employees on sick leave or self-isolating will be able to receive Statutory Sick Pay (subject to usual eligibility requirements) during this period (or sick pay arrangements in line with normal Company policy). The government guidance states that short-term illness/self isolation should not be a consideration in deciding whether to furlough an employee. If, however, employers want to furlough employees for business reasons and they are currently off sick, they are eligible to do so, as with other employees. In these cases, the employee should no longer receive sick pay and would be classified as a furloughed employee instead.

Can I furlough an employee who has received a letter from a medical adviser stating that they need to self-shield for a 12-week period?

Yes, employers are entitled to furlough employees who are being shielded (or they need to stay at home with someone who is shielding) or off on long term sick leave. The guidance states that it is up to employers to decide whether to furlough these employees. Employers can make a claim through the CJRS and the SSP rebate scheme for the same employee but not for the same period of time. Therefore, when an employee is on a period of furlough leave employers can make a claim through the CJRS but not the SSP rebate scheme.

What happens if an employee falls unwell during a period of furlough leave?

If an employee becomes unwell during a period of furlough leave, the government guidance states that an employer is not obliged to end the period of furlough leave and place the employee on sickness absence instead (for example SSP), however they can choose to do so.

If a furloughed employee who becomes unwell is moved across to SSP, then the employer is no longer able to claim for the furloughed pay through the CJRS. Employers are required to pay SSP themselves. If employers keep unwell furloughed employees on the furloughed rate, they will remain eligible to claim for these costs through the CJRS.

Can I place an employee on a period of furlough leave, who commenced their employment with the Company on 4 March 2020?

Employees who commenced employment with the organisation after 28 February 2020 cannot be furloughed or claimed for in accordance with this scheme.

Do employees still accrue holiday during a furlough leave period?

Yes, statutory annual leave will continue to accrue as normal during a furlough leave period. Contractual annual leave in excess of the statutory minimum will also continue to accrue, unless the contract specifically provides otherwise. We have included relevant wording within the template furlough worker agreement in relation to this.

The Government has announced that it will be implementing legislation in relation to statutory holiday entitlement in order to allow workers to carry over up to 4 weeks’ annual leave into the next two leave years to assist with the impact of Covid-19 on holiday entitlements and the ability to take leave. The additional 1.6 weeks can already be carried forward in to the next leave year if agreed by both parties.

What happens if an employee has more than one job?

If your employee has more than one employer, then they can be furloughed for each of the jobs that they undertake. Each job is separate, and the cap applies to each employer individually.

Employees can be furloughed in one job and receive a furloughed payment but continue working for another employer and receive their normal wages.

Can my employee get a new job whilst they are on furlough leave with my company?

If contractually allowed, your employees are permitted to work for another employer whilst you have placed them on furlough, in line with the government guidance on the scheme. It is common for relevant clauses within an employee’s contract to state that they may not undertake work for another organisation unless express permission is obtained from the company.

How should I select employees to place them on a period of furlough leave?

The organisation should ensure that it follows a fair procedure in order to select employees for furlough leave and that decisions made are in line with the usual requirements of equality and discrimination legislation and best practice. Employers should also consider whether it would be possible to request volunteers.

We would advise that employers keep a record of the reason/decision made to furlough employees.

Can an employee become a volunteer whilst undertaking a furlough leave period?

A furloughed employee can take part in volunteer work, as long as it does not provide services to or generate revenue for, or on behalf of your organisation or a connected organisation. It is advisable for employers to consider implementing a policy/guidance in relation to the emergency volunteering legislation, issued by the Government, as part of measures being taken to manage the impact of Covid-19.

Can an employee undertake training during a furlough leave period?

A furloughed employee can take part training, as long as it does not provide services to or generate revenue for, or on behalf of your organisation or a linked or associated organisation. The government guidance states furloughed employees should be encouraged to undertake training.

However, if workers are required to for example, complete online training courses whilst they are furloughed, then they must be paid at least the NLW/NMW for the time spent training, even if this is more than the 80% of their wage that will be subsidised. The NLW/NMW increases from 1 April 2020 must be taken in to account for any time spent training.

Can apprentices be furloughed?

Yes, apprentices can be furloughed in the same way as other employees and they can continue to train whilst furloughed.

However, you must pay your Apprentices at least the Apprenticeship Minimum Wage, National Living Wage or National Minimum Wage (AMW/NLW/NMW) as appropriate for all the time they spend training. This means you must cover any shortfall between the amount you can claim for their wages through this scheme and their appropriate minimum wage. The AMW/NLW/NMW increases from 1 April 2020 must be taken in to account for any time spent training.

Guidance is available for changes in apprenticeship learning arrangements because of COVID-19.

Can you furlough an employee who is currently on maternity leave?

An employee must take their compulsory maternity leave which is at least 2 weeks off work (4 weeks if they work in a factory or workshop) immediately following the birth of their baby. This is a health and safety requirement. The government guidance states that normal rules apply with regards to SMP and leave provisions. The guidance does not provide definitive information on whether an employee on maternity leave can be designated as a furloughed worker or whether they would have to end their maternity leave period (by providing the required 8 weeks’ notice) and then be placed on a period of furlough leave. It is important to note that it is also unknown whether those on maternity leave would be able to become a furlough worker and, when the furlough leave ends, then be able to return to their maternity leave period. There is a risk that furloughing those on maternity leave could mean they have to return to work earlier than they expected if they are unable to continue with their maternity leave after a period of furlough leave or when the job retention scheme ends.

We await further guidance on this point. This would also apply to those undertaking a period of other family-related leave.

For those employees only receiving Statutory Maternity Pay (SMP)

It seems that the guidance does not envisage employees being placed on a period of furlough leave and becoming a furlough worker whilst receiving SMP. Employers can already claim back the cost of SMP under current rules in relation to this.

For those employees who receive enhanced contractual maternity pay

The HMRC guidance states that where employers pay contractual maternity pay at a higher rate than SMP, then an employer would be able to make a claim through the CJRS for enhanced (earnings related) contractual pay for employees.

How should I calculate what to pay an employee returning from family-related leave?

Their pay should be calculated in line with other employees and should be calculated against their salary, before tax, not the pay they received whilst on statutory leave.

Claims for those on variable pay, returning from statutory leave should be calculated using either the:

• same month’s earning from the previous year • average monthly earnings for the 2019-2020 tax year.

Can an employer choose to pay 100% of an employees pay, whilst they are undertaking a period of furlough leave?

As a minimum, employers must pay their employee the lower of 80% of their regular wage or £2,500 per month. An employer can choose to top up an employee’s salary to 100% but is not obliged to under this scheme.

Employer National Insurance Contributions and automatic enrolment contribution on any additional top-up salary will not be funded through this scheme. Nor will any voluntary automatic enrolment contributions above the minimum mandatory employer contribution of 3% of income above the lower limit of qualifying earnings (which is £512 per month until 5th April and will be £520 per month from 6th April 2020 onwards).

How do I calculate an employee’s pay for the purposes of this scheme?

For full time and part time salaried employees, the employee’s actual salary before tax, as of 28 February should be used to calculate the 80%.

For an employee whose pay varies, if the employee has been employed for a period of 12 months or more prior to the claim, you can claim for the higher of either:

• the same month’s earning from the previous year; or • average monthly earnings from the 2019-20 tax year

If the employee has been employed for less than a year, you can claim for an average of their monthly earnings since they started work.

If the employee only started in February 2020, use a pro-rata for their earnings so far to claim.

Once you’ve worked out how much of an employee’s salary you can claim for, you must then work out the amount of Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions you are entitled to claim.

Are employees entitled to national minimum/national living wage whilst on furlough leave?

Individuals are only entitled to the National Living Wage (NLW)/National Minimum Wage (NMW) for the hours they are working or treated as working under minimum wage rules.

Therefore, furloughed workers, who are not working, must be paid the lower of 80% of their salary, or £2,500 even if, based on their usual working hours, this would be below NLW/NMW.

However, if workers are required to for example, complete online training courses whilst they are furloughed, then they must be paid at least the NLW/NMW for the time spent training, even if this is more than the 80% of their wage that will be subsidised.

What employment rights do employees have whilst on furlough leave?

Employees that have been furloughed have the same rights as they did previously. That includes Statutory Sick Pay entitlement, maternity rights, other parental rights, rights against unfair dismissal and to redundancy payments. Terms and conditions of employment and continuity of employment will not be affected during this period.

Can you make an employee redundant whilst they are on a furlough leave period?

Yes, providing you follow a fair procedure in line with current employment law legislation and best practice, you can make an employee redundant whilst they are undertaking a period of furlough leave or when they return from a period of furlough leave.

What happens if an employee refuses to be placed on a period of furlough leave?

If an employee refuses to be placed on a period of furlough leave then the organisation will need to consider alternatives, which may be to place them on a period of lay off or short time working (providing there is a relevant clause within the contract of employment to do so) or consider implementing a redundancy process. In either of these situations, it would be advisable to seek guidance from the HR team on the process to follow.

Can an employer rotate employees who are furloughed?

Yes, employees can be rotated to be placed on a period of furlough leave and can be furloughed multiple times, providing that each separate instance is for a minimum period of 3 consecutive weeks.

What happens in TUPE situations/change of ownership?

A new employer in these situations will be eligible to make a claim under the CJRS in respect of employees of a previous business transferred after 28 February 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership.

If you have any questions, please do contact us.

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