Support for Directors affected by the COVID-19 outbreak

Job Retention Scheme

One of the key measures announced by the Government to support employers was the Coronavirus Job Retention Scheme, which allows UK employers to access a financial subsidy worth 80% of their workers’ wage costs, up to a cap of £2,500 per worker per month. Employers would need to class their employees as ‘furloughed workers’ to be eligible for this scheme.

A ‘furloughed worker’ is essentially a non-working employee who is retained on an employer’s payroll, rather than being laid off.

There is nothing preventing a director from being furloughed but they must not undertake employee work when furloughed and they must be paid a salary through the PAYE system.

The scheme has now been extended until 30th September 2021. 

Due to the complexities around this area we have provided more detailed advice and a range of helpful FAQs in our article here

Enhanced SSP for COVID-19 

If a director is off sick due to COVID-19 they can claim Statutory Sick Pay (SSP) as with any employee. Among its package to help employers, the Government  introduced legislation to allow employers to reclaim SSP relating to employee absences as a result of COVID-19. This refund covers up to 14 days’ SSP per eligible employee. The current rate of SSP is £95.85 per week (from 6th April 2021 £96.35), which can be paid from the first day of absence.  

Deferring tax payments 

Any payments on account towards Income Tax for the 2019/20 tax year, which would have been due for payment by the end of July 2020, have been deferred until the end of January 2021. This is an automatic process and does not need to be applied for. 

Further, on 24th September 2020, the Government announced that taxpayers with up to £30,000 of Self-Assessment liabilities due will be able to use HMRC’s self-service Time to Pay facility to secure a plan to pay over an additional 12 months. This means that Self-Assessment liabilities due in July 2020 will not need to be paid in full until January 2022.

Any Self-Assessment taxpayer not able to pay their tax bill on time, including those who cannot use the online service, can continue to use HMRC’s Time to Pay Self-Assessment helpline to agree a payment plan. They also have a dedicated helpline –0800 024 1222  – with increased staff numbers, to help those who are concerned about being able to pay their tax due to coronavirus. 

Off-payroll working in the private sector (IR35)   

The Government has deferred new rules affecting contractors working for the private sector, directly or through an agency, that were set to be introduced on 6th April 2020. The rules have been pushed back to 6th April 2021.  

How we can help

Individual circumstances will vary and we recommend speaking to a member of our team to understand how the information above applies to you. To arrange a telephone or video consultation, call us today on 0151 420 6933.  

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For our latest COVID-19 news and guidance for your business, visit our dedicated Coronavirus Hub.
We will be updating it regularly as we continue to monitor and digest all the latest information

 

Date published 1 Apr 2020 | Last updated 5 Mar 2021

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.