As my regular readers will know, over the last three weeks, I have posted a series of Blogs on the effects of the coronavirus on businesses and individuals. As a result, I have received several emails on the various issues raised. Today I have selected a number which I hope you will find either thought-provoking or personally relevant. The topics today:
- Holidays whilst on Furlough
- When will I get my CJRS (Coronavirus Job Retention Scheme) grant?
- Do I have to work if I’ve been furloughed?
- Can I still run my eBay business?
- Am I allowed to work and still claim SEISS (Self-Employed Income Support Scheme)?
- Will I get fined for not sending in my Accounts?
1. Holidays while on Furlough
I usually employ around a dozen individuals, right now eight of them are on furlough leave. I understand that entitlement to holiday accrues during furlough, as employment continues. But what about staff who had booked time off work during April, May and June? Will this count as holiday taken – or should it be given back, as it were?
My second related question is, I read in the papers this week that some folk were also being given time off in lieu of bank holidays during the furlough. Is this true?
Answer
To answer your first question, if a worker is furloughed, they cannot also be on holiday. You should tell staff that if they already booked holidays which occur during furlough, they can be taken later. Also, this ‘deferred’ holiday can be taken over the current leave year and the next to minimise the effect on businesses.
Secondly, on the subject of bank holidays, this was not covered by Rishi Sunak. Still, commonsense would tell you that this is highly unlikely to be carried forward.
2. When will I get my CJRS grant?
I run a restaurant, thus furloughed all my staff. Unfortunately, I do not have any cash reserves to pay my employees until I get a CRJS grant. As a cash-starved business, I’ll need the money by 30th April to avoid going under, is there any other emergency funding available?
Answer
The Coronavirus Job Retention Scheme or CJRS is the only help available. Still, the good news is that HMRC announced today that the scheme is due to go live on Monday 20th April, with the first payments made ten days later. All future CJRS claims then paid within four to six days. It is just possible that the CRJS grant may hit your bank account a day or two after the 30th. Your bank should give you a temporary overdraft to cover the wages due to a recent agreement between the Treasury and all of the large high street banks.
3. Do I have to work if I’ve been furloughed?
I work for a plumbers’ merchant and was place on furlough 3 weeks ago, but I’ve now been told by my employer, and I quote, “you are technically furloughed, but must still work”. Can he require me to work and just as importantly, is this legal if I’m officially on furlough?
Answer
The first thing to be said is that the Treasury considers the provision of plumbing and electrical supplies to be essential services. Therefore your employer can require you to work unless you are in one of the designated vulnerable groups. Groups with underlying health conditions, such as chronic asthma or type one diabetes.
As to your second point, if you are working and your employer claims a grant for you under CJRS, this is most definitely, illegal. Also, HMRC is setting up an online “whistle-blower” service for workers to report employers who abuse the system.
4. Can I still run my eBay business?
I deal in rare stamps, with most of my sales through eBay. I’ve checked on the government website which says that mine is not an essential business and must close immediately. I’m worried as I only started my business in May 2019 and am therefore not eligible for the SEISS scheme. Is there anything else I can claim?
Answer
Good news, you can carry on trading perfectly legally as you are working from home. The closure of non-essential businesses rules only applies if you have premises which are visited by members of the public.
5. Am I allowed to work and still claim SEISS?
I’m a plumber and have been told that it is okay for me to carry on working if what I’m doing comes under the heading of essential or emergency repairs. So, to help my regular customers, I decided to carry on working. Unfortunately, emergency work is only about 30% of what I did before the lock-down. Can I still claim SEISS, or am I only eligible for this if I pack in working completely?
Answer
You are not in an either-or situation. You are perfectly entitled to claim the 80% of average past Net Profits SEISS grant and charge customers for any work done. At the end of your financial year declare any grant income on your tax return as income, just the same as income from doing emergency work.
6. Will I get fined for not sending in my Accounts?
I am a sole director running a small limited company, and the Accounts are due to Companies House on 31st May. I cannot achieve this because, for over a month, I’ve self-isolated due to a heart condition. I’ve been on their website, and there doesn’t appear to be a blanket extension. Will I be fined?
Answer
Good news, Companies House has recently announced a 3-month extension period for filing accounts for those citing COVID-19 or health issues. You must apply to extend online and cite your COVID-19 related health issue in the application. Companies House says that this ensures the extension is automatic and immediate.
If you would like more detailed information on some aspect of UK Tax, send me an e-mail and I’ll be pleased to advise further.
