We have pulled together some answers to the questions we have been asked the most about business support in response to Covid-19 (coronavirus).
As always, if you need to discuss anything specific in relation to you and your business please contact us .
Q. What is a furloughed employee?
A. Furloughed employees are workers whose employer can’t cover staff costs due to the coronavirus crisis.
Q: Can directors make use of the Coronavirus Job Retention Scheme (CJRS)?
A. 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).
To find out more about the Coronavirus Job Retention Scheme click here.
Q. Are employers to continue paying employees on the usual weekly/monthly basis and then reclaim the 80% retrospectively in respect to the Coronavirus Job Retention Scheme?
A. Yes. The employee needs to be furloughed but remain on the payroll and then the subsidy can be claimed and backdated to when they were furloughed from when the scheme is up and running, which should be the end of April.
Q. Are PAYE staff on zero hours contracts also covered by Coronavirus Job Retention Scheme and do you have any idea how their wage will be calculated, which often varies week-to-week?
A. Yes, they are. If the employee has been employed (or engaged by an employment business) for a full twelve months prior to the claim, you can claim for the higher of either the same month’s earning from the previous year or the 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.
Q. When I am going to hear about getting help with a grant to support my business and how much will it be?
A. Local councils are currently working on identifying businesses which will be eligible for the grants. A one-off grant of £10,000 to support small businesses currently eligible for Small Business Rate Relief (SBRR) or rural rate relief.
If your business is in the retail, hospitality or leisure sector in England, then you may be entitled to a cash grant. If you have a property with a rateable value of less than £15,000 then you will be entitled to a grant of £10,000, whether or not you are entitled to small business rate relief or rural rate relief.
If your business is in the retail, hospitality or leisure sector. If you have a property with a rateable value of between £14,999 and £51,000, then you will be entitled to a cash grant of £25,000.
Your local council (e.g. West Norfolk Borough Council) will be contacting customers and asking them to complete an online form to confirm they have the correct occupier and the business is still trading. Once they have the information back, this will be checked, and grants awarded.
Payments should be made in early April.