Coronavirus - more on who you can furlough, plus a furlough claim calculator
As expected, the Government has announced further details to the different support schemes they have released. As well as providing an update below, we'd like to take this opportunity to share some positive information to help your business, including free courses from Open University.
JOB RETENTION SCHEME FURLOUGHING OF INDIVIDUALS THAT ARE NOT EMPLOYEES
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 below 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 below, all other guidance is applicable to these cases, and should be followed.
Office Holders Office holders can be furloughed and receive support through this scheme. The furlough, and any ongoing payment during furlough, will need to be agreed between the office holder and the party who operates PAYE on the income they receive for holding their office. Where the office holder is a company director or member of a Limited Liability Partnership (LLP), the furlough arrangements should be adopted formally as a decision of the company or LLP.
Company Directors As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme. Company directors owe duties to their company which are set out in the Companies Act 2006. Where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed. Where one or more individual directors’ furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned.
Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, for instance, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.
This also applies to salaried individuals who are directors of their own personal service company (PSC).
EMPLOYEES THAT ARE CARERS
Since our last update, the Government has clarified that employees who will struggle to work from home / unable to do their jobs due to caring responsibilities arising from Coronavirus, including parents who have children off school, can be furloughed.
FURLOUGH LETTER TEMPLATE AND FURLOUGH CLAIM CALCULATOR
If you are having to furlough employees and individuals, you must keep records of letters issued, for a period of 5 years. We have template letters you can use - please email Jo (email@example.com) in our support team or call 0161 905 1801 if you would like a copy. We must state that they are examples only, and you should confirm with your legal team and / or HR advisor before using them.
We also have a furlough claim calculator (Excel) and guidance on how to use it. Again, please email Jo if you would like to be sent a copy of this.
The Banks have come under a great deal of scrutiny for their response to businesses applying for loans. In an announcement a few days ago, Rishi Sunak has confirmed that for facilities under £250k applied through high street banks and applications made via the Coronavirus Business Interruption Loan Scheme, personal guarantees will not be required. At LWA, we are assisting clients with cash flow forecasts for loan funding. For clients on Xero we can use Futrli to speed up the process from days into hours. If you would like cash flow forecasting support to assist your loan applications, please contact firstname.lastname@example.org or call 0161 905 1801.
At LWA, part of our specialist audit work involves services for charities, and for our clients in this sector, we wanted to provide a summary of the support announced in Rishi Sunak's announcement yesterday. The details of the announcement include:
Cash grants direct from the Government from a pot of £360m for charities providing key services during the coronavirus shutdown.
A pot of £310m will be available via National Lottery Communities Fund for small local charities, including those delivering food and essential medicines and providing financial advice in England.
For small local charities in Scotland, Wales and Northern Ireland, £60m of the overall £370m funding will be issued via the Barnett formula.
Whilst it has been confirmed that charities are eligible to claim support via the Job Retention Scheme, the Chancellor stated on this point that "shutting up shop at this moment would contravene their very purpose."
The Government will match pound for pound, the money raised by BBC's Big Night In charity appeal taking place on 23rd April.
At least £20 million will go to the National Emergencies Trust appeal.
OUR FULL UPDATE FOR SELF EMPLOYED WORKERS We published an update specifically for self-employed workers covering the support package announced by Rishi Sunak plus the subsequent self-employment income support scheme to apply for funds. Please click below.
PENSIONS AFFECTED BY CORONAVIRUS Although state pensions are unaffected by Coronavirus, news reports about how the outbreak has caused uncertainty in world stock markets may cause worry for individuals with private pensions. The People's Pension have advised that while short-term fluctuations in savings can look worrying, it’s important to look at the bigger picture.
Please speak to your pension provider or independent financial advisor if you have concerns about how your investments may be affected. If you want to communicate with your employees about how their pensions could be affected once you are aware, you may want to use the letter templates that have been created by The People's Pension - we advise that you liaise with your pension provider before issuing these.
CORONAVIRUS FRAUD AND CYBERCRIME - PROTECT YOUR BUSINESS & STAFF
Since the COVID-19 coronavirus outbreak, businesses and individuals have had to make numerous changes to the way they work including moving to homeworking and managing tax payments differently. Unfortunately, fraudsters are exploiting members of the public and companies with various types of scams and cybercrime. With information from NatWest bank, we have collated the top threats that customers are currently facing and how you can protect yourself and your business from any potential fraud / crime.
FREE COURSES FROM OPEN UNIVERSITY DURING THE COVID-19 SHUTDOWN
We want to provide practical advice and positive support for our clients during this period of uncertainty. Free courses from Open University could be an ideal solution for staff working from home to provide a break from the norm, whilst earning CPD hours. There are a range of subjects for which the free courses are available including Money and Business, Languages and much more. Click on the link below to go directly to the Open University free courses web page.
This is a tough time for everyone, and whilst most UK business owners are keeping busy applying for eligible Government support, providing work for their team to do at home, or unfortunately having to furlough some of their people, we must try to remember that there will be an end and we will come out the other side. Let's try to focus on keeping ourselves, our family and our employees mentally and physically healthy and try to find the little glimmers of light in the situation. There is a great article on Entrepreneur.com with some practical and positive ideas businesses can implement - click below to read more.
On 24th January 2020, an announcement was made that the current employment allowance legislation will undergo changes that are likely to affect many larger businesses. A further announcement in the 2020 Budget by Rishi Sunak increased the amount available to eligible businesses.
HERE TO HELP YOU GET THROUGH THIS If you have any specific concerns as a result of the Coronavirus outbreak, please reply to this email or contact us on 0161 905 1801 in Manchester, or 01925 830 830 in Warrington. Our thoughts continue to be with those that have suffered the loss of loved ones, and we hope you and your family stay safe and well.