Thank you to everyone who attended and submitted questions. We were overwhelmed with the response so apologies to anyone whose query we did not have time to address during the session. A summary of the questions and our answers is below.
Full Video of the Session
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Below is a list of all the questions we received and our responses organised by topic. Please bear in mind that the answers apply to the situation as of the time of the session (27th March 2020).
Coronavirus Business Interruption Loan Scheme (CBILS)
Is the scheme only available to businesses that would not be able to borrow otherwise under normal circumstances, I have heard that this is the case
Yes, it seems that if the company is able to obtain a bank loan under normal conditions, this will be offered in preference to a CBIL.
NatWest were saying they will only put you on the interruption loan if you don’t qualify for their standard loan – is that still true?
That is still correct per their website (retrieved 30th March 2020).
I have heard that if you would qualify for a different loan from the bank i.e. one of their regular loans; the banks will not offer you a loan under the scheme. Do you have any information/advice on this?
Correct – though there is pressure on the banks to relent on this.
When applying for support from your bank. It is obviously advantageous to qualify for the BILS rather than a regular loan. As you mentioned you need to demonstrate you are struggling, but am I right to say you still need to appear viable. A difficult line to walk. Any advice?
Our main advice is to show that post coronavirus and when back on track, your business will go back to being viable, so that you can repay the loan. In other words: all things being equal there is no reason you should not go back to being profitable/successful.
Tax and Payments Deferral
Monthly Tax and NI. Payments can we have a 3 month holiday on these Payments and if so from when?
There is no formal deferral offering for monthly PAYE due. PAYE together with Corporation Tax fall under the Time to Pay Arrangements. As such, each month once the liability is known you will need to contact HMRC to discuss a payment plan arrangement if necessary. The number to call is 0800 024 1222.
Regarding the automatic VAT deferral for businesses – are we required to cancel the direct debit now or will they automatically adjust this their side?
100% you must cancel the direct debit. This has been advised by the government.
Furloughing under the Coronavirus Job Interruption Scheme
Our company is made up only of 2 directors, both on PAYE, our incomes are supplemented by dividends, how does the “furlough scheme” relate to companies in our position?
Only directors who will not be performing any day to day tasks can be furloughed. The furloughed amount is capped at the lower of 80% or £2,500 of your PAYE salary. Dividends are unfortunately not taken into account.
If you are a Director of a business, that is employed also by the business as well as taking dividends from the company. I would assume that you wouldn’t be able to Furlough yourself the director. Which in turn would leave your business without anybody with the legal duties of director?
There is clarification required to confirm whether a director who is solely dealing with “administrative tasks” such as furloughing their employees is still considered an active employee and therefore can not be furloughed.
As referred to previously, a director who is fully furloughed can only claim under the Job retention scheme for their PAYE salary (the lower of 80% of their salary and £2,500).
What is the help offered for Directors as we cannot be furloughed? Thank you.
Please see the previous answer.
We sent a job offer letter to a new salesperson on 11th Feb. She couldn’t leave her old job until 6th March and therefore didn’t start work for us until 9th March. Is there any leeway from the gov as she left her old job to join us,
As we understand it unfortunately not. The rules to furlough an employee are that they were employed with the company on the 28 February. This is very tough on the potential employee if you are unable to now employ them.
If the employer is topping up their employee’s salary, are they still expected not to be working within the company?
Yes, even if the employer tops up the 20% salary, as the employee is furloughed there not allowed to work at all within the company
Have you got an HMRC portal link or phone number pls
HMRC hope to have a portal set up in April
Will Davis Grant need written permission from a company hows payroll you take off, to Furlough an employee for a business or will you be doing automatically?
Davis Grant will require email confirmation from payroll clients of those employees they wish to furlough. For more details please email firstname.lastname@example.org.
A furloughed staff member has a low basic monthly salary to which is added commission on deals. The combined salary payment (basic + commission) is paid through PAYE. What will the 80% be based on? Only basic salary? Basic + regular commission? The average monthly earning during 2019 (basic + commission)?
The 80% is based on basic salary, excluding bonus or commission
Will the tax be basic rate for everyone? i.e. I will be paying furlough pay to employees who are normally 40% taxpayers.
Only if the employees have no other sources of income or significant taxable benefits then the tax rate is likely to be the basic rate.
If I made employees redundant during March, am I right in saying that I can take them back on and place them onto Furlough pay?
You can take them back on and furlough them.
I you are a ‘ONE PERSON’ Ltd. Company then the only thing taken into consideration is the basic salary that you pay yourself and NOT the dividends? If this is the case, how should we proceed?
That is correct. If the company has ceased operations and the sole director is only doing minor admin tasks then they can furlough themselves and receive the lower of 80% of their former monthly salary or £2500.
If there are two directors, can one of them legitimately take furlough whilst the business continues
If you can justify that the other director is no longer required to work and is not working then you can furlough them.
For EMPLOYEES who qualify to be furloughed, but the business owner/s haven’t claimed for them, who can the employee talk to in order to claim their pay?
The employees either have to be made redundant (following employment law), furloughed or continue to be employed. If employees are furloughed they have to be paid a minimum of the lower of 80% of their former monthly pay or £2500.
Did you say a furloughed employee can ‘volunteer’ to do activities within the organisation (not revenue-raising)?
No – a furloughed employee can volunteer outside of the business, i.e. for the NHS. They cannot volunteer for the company that has just furloughed them.
We had a new starter 2 weeks ago, who moved from another company (so would have earnt in February from the old company). I know you said they need to be on our PAYE before 28th Feb but what will HMRC do in cases like this. Do you think they will make exceptions? Otherwise, anyone that has moved jobs in March effectively has to be sacked.
Unfortunately that seems to be the case, unless they are re-employed by their former employer and furloughed by them.
When and how do we submit a claim to HMRC on the Furlough Scheme?
HMRC is developing a portal which claims will be made through. This is due to be available by late April.
If an employee is unable to do so because of being a carer for someone who is sick or is caring for children – can they be furloughed?
An employee that is caring for Family members would claim Statutory Sick Pay. It is only if they are available for work but the company has no work for them that they can be furloughed.
How are employees on maternity leave due to be treated and any processes in place that I need to be aware of?
Any employees on maternity leave will be claiming statutory maternity pay and the employer will be reclaiming either 92% or 103% or the SMP payment from HMRC (depending on the employer’s size). Only when employees return to work can you consider furloughing them.
What if the company does not have the cash to pay the furloughed employees? What are the options?
The company should consider applying for bank loan facilities using the Coronavirus Business Interruption Loan Scheme. Failing this it may need to consider discussing matters with an insolvency advisor.
If I have an external contractor to which I pay a monthly invoice, how does the furlong scheme work?
This scheme is only for PAYE employees. An external contractor is presumably self-employed and if applicable can claim for themselves via the Self-Employed Income Support Scheme.
I had two new staff members start in March, will they qualify for furlough?
Unfortunately not. They had to be employed before 28th Feb 2020.
If the employee is on furlough, you mentioned the director can top up their wage if they chose. Would this mean the employee would be allowed to work from home?
No, a furloughed employee cannot do any work for the company.
As an employer would a conversation be enough or do we need to have this in writing?
We recommend you take HR advice on this point but our understanding is that agreement to be furloughed should be in writing.
If an employee left the business just before the was announced (but after 28 Feb) can they be re-employed and furloughed?
If mutually agreed, the company can re-employ the individual and then furlough that employee.
Can an employee claim furlough independently – in the case where they have been overlooked
No – the claim is done by the employer.
Can a employee work for another business whilst furloughed?
If you are a freelancer trading as a Ltd Company of one person (as a director, paying basic salary and dividends) are you covered by any assistance? If so, what can be claimed? Thanks.
If the company has ceased operations and the sole director is only doing minor admin tasks then they can furlough themselves.
Do you have a letter template to send to staff that we want to furlough
Yes – please contact us to obtain this.
To confirm, is the £2500 employee grant a cap and therefore the most efficient furlough salary less than £30k, as employers will want to ensure the salary + ER NI + pension is covered. So a salary closer to equivalent £26k?
A salary of £37,500 will receive the maximum furlough payment being the lower of 80% of the normal monthly salary and £2500, i.e.£37,500 x 80% = £30,000 which is £32500 per month.
If we pay furloughed employees and then for some reason do not receive the grant, could pay be clawed back?
Once any salary is legally paid to an employee, the employer is unlikely to be able to claw it back.
Once an employee is furloughed, can they be brought back the following month?
The minimum furlough period is 3 weeks
Could we have a video copy of this webinar once it’s finished, please?
Absolutely – this will be sent to you and available on our Youtube Channel.
If your taken Ill during this period and by any chance pass away and don’t have a Will or Power of Attorney in place. Who will take over the running of the business?
This is outside the scope of this public session. Please feel free to contact us so we can discuss your specific circumstances.
What is your advice in taking higher dividends this year, since the Governments may need to increase tax rates next year to help recoup part of their assistance during this Coronavirus outbreak?
This is outside the scope of this public session. Please feel free to contact us so we can discuss your specific circumstances.
Business Rates Relief and Grants
Our rent is fully inclusive of rates, service charge and utilities. If our landlord is entitled to the rate relief / grants on offer are we entitled to ask for a proportional reduction in our monthly rent?
Rates relief is only available to companies that are registered with the local council for business rates. If you are not such a company, this will then be a negotiation point with your landlord.
If you have multiple small business units, can you claim 10k per unit?
I have a holiday-let that currently pays business rates and gets small-business-rates-relief. I have heard that this business might be eligible for a grant of £10,000. Is this the case?
We suggest you contact the local authority that this property is under to confirm its entitlement to any available grants.
Is the self-employed scheme only for those in receipt of trading profits rather than profits from a property investment business?
Yes, the Self Employed Income Support Scheme relates to trading profits only.
I only became self-employed in 2018 September so although I put in a tax return for 2018/9, its only in the last 12 months that my earnings have become stable. Do you know if 2019/20 earnings will be taken into account for the grant? Thank you
This scheme is not based on 2019/2020 earnings. Only 2018/2019 (the year ended 5th July 2019 or the average of that year and years previous two.
Will there be a check to ensure that the person has lost business?
No. The grant is based solely on the qualifying criteria laid out. In contrast to the furloughing of workers, the self-employed can continue to work wherever possible.