Bournemouth Coastal BID
Please see below for an update outlining what we know so far about the Coronavirus Job Retention Scheme outlined in the Chancellor’s speech on 20 March.
One thing is clear- this is a reimbursement scheme so employers will have to pay “furloughed” workers their salaries, and will then be reimbursed though by HMRC.
What are the practical considerations for businesses?
- This is a Government grant scheme- employers will be reimbursed up to 80% of their furloughed employee’s salaries, the scheme being administered by HMRC.
- Payments will be backdated to March 1st. HMRC are currently working n a new online portal via which employers will submit details of their furloughed employees. This portal is not yet ready but we recommend checking the Government Website which appears to be updated regularly as and when new information becomes available.
- The Chancellor has said that there will be no limit on the amount of funding available, but has specified that this will be up to £2,500 per employee for an initial period of 3 month, but the scheme will be extended if necessary.
- All businesses in the UK are covered by this scheme- large or small, profit or non-profit making.
What should employers do now?
- You should speak to your employees and advise them that they are to become furloughed, and confirm this to them in writing. Ask them to sign a copy of the letter confirming the change in their status and this will be governed by existing employment law.
- Whilst this advice is given in good faith we are not employment specialists and you should seek appropriate legal advice if you wish. We recommend Coles Miller Solicitors who have kindly agreed to provide our levy payers with a free initial discussion about the effects of coronavirus on their businesses and employees. You can telephone them on 01202 355695 and ask to speak to someone in their employment team, mentioning that you are a Coastal BID business.
- You should tell your employees to look at this web page Guidance for employees and in particular that they will remain on the payroll, but will not be able to carry out any work for you during this period. Whilst as an employer you are able to “top up” the 20% reduction in their income, you are not obliged to do this and if the employees income is reduced by this they may qualify for Universal Credit.
What are the timescales for implementation of this scheme?
As mentioned above, the scheme is to be administered by HMRC through an online portal, and we are advised that they are working hard behind the scenes to prepare this as quickly as possible. The Government have said in the meantime that businesses can rely on a business interruption loan in order to fund their cash flow in the meantime which the scheme is implemented.
It is clear there are lots of unanswered questions about the implementation of this scheme and we are all holding our collective breath waiting for the latest updates from the Government and HMRC.
Details of other financial support announced on 20 March:
- Universal Credit allowance increased £1,000 a year and the next tax self assessments will be deferred until the start of next year.
- Full Universal Credit at a rate equivalent to statutory sick pay available to self-employed people.
- An additional £1 billion announced to cover 30% of housing rental costs.
- Deferral of next quarter of VAT payments so no business will pay VAT from now until the end of June and will have until the end of the financial year to repay bills.
- Coronavirus Business Interruption Loan Scheme (announced 11 March) will now be interest free for 12 months (originally 6 months).
Bournemouth Coastal BID will continue to scour resources online and will update our Facebook @coastalBID, and Twitter @CoastalBID so please follow these to keep up to date. We will also continue to lobby on your behalf via our MP’s, the Association of Town Centre Managers, and British BIDs.