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Conovirus Jpb Retention Scheme

26 - 03 - 2020

Guidance Note

The Coronavirus Job Retention Scheme

 

Please be aware that this note is based on the information published as at 23 March 2020 and is intended to provide guidance on how Foremans LLP believe at this juncture the scheme will be implemented. The information is based on Foremans LLP’s interpretation of the available information. You should not regard this as advice on how the scheme will operate as several factors have still to be announced.

 

         1. A member of staff should be designated as a Furloughed Worker and notified of the change.

         2. Any change in staff designation remains dependent on employment law.

         3. A member of staff Furloughed must not work for the employer during the period of Furlough.

         4. The Furlough period can be from 01 March 2020.

         5. Initially the Furlough period will last 3 months but may be extended.

         6. Employees must be on the business payroll as at 29 February 2020.

         7. All UK businesses with a PAYE scheme are eligible for the scheme regardless of size.

         8. The payment from the scheme is a grant not a loan.

         9. The grant will be paid direct to the employer.

       10. The maximum monthly wage is expected to be capped at £2,500.

       11. The maximum grant per employee is expected to be the lower of:

                                               • 80% of wages – the definition of wages has not yet been clarified

                                                 and

                                               • £2,500 per month.

      12. Whether the employer will be expected to top up the employees’ salary to the full amount usually paid seems to be dependent, at the moment, on employment                law.

      13. A new online IT system is currently being developed to process the payments. The development may take some time. In order to assist employers with                            cashflow issues businesses should consider applying to the Coronavirus Business Interruption Loan Scheme.

      14. The employer will pay the employee through the payroll.

      15. The employer will report the payments through the Real Time Information (RTI) system as normal.

      16. The scheme will be administered for the Government by HMRC.

 

Further useful information can be found at:

 

https://www.businesssupport.gov.uk/coronavirus-job-retention-scheme 

 

If you would like to discuss any of the issues noted above please contact us on:

 

01244 625 500 or 01978 364 000

 

contactus@foremansllp.com

 

Whilst all due care and attention has been taken in the preparation of these notes no liability can be accepted for any omission or item contained therein.

 Foremans LLP                                                                                                                                                                                                                                                 25 March 2020

     

     

 

 

 

 

 

 

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Fixed Data

Assumptions

General                                                                                                                              

• The user is over 21 and subject to tax in the UK
• The user wishes to minimise their tax liability
• The user is subject to national insurance i.e.he/she is not over retirement age
• Only current tax rates and limits are applied
• No tax mitigation payments are made e.g. pension contributions
• Only 3 digit letter 'L' tax codes shown in the drop down list can be entered 
• The user does not have a turnover greater than £100,000 where fewer reliefs and or higher taxes may apply

Expenses

• All miles claimed as expenses are for business use using a personally owned car or van
• All other expenses claimed are wholly, necessarily and where appropriate exclusively for the benefit of the business

Foremans LLP Charges

• Foremans fees associated with Limited Company, Sole Trader or Umbrella are as per published rates
• Foremans current Service Costs are allowed for in all calculations.

Holiday Pay

• Holiday pay is accumulated week by week by Umbrella or Agency employer but paid out during the year

VAT

• Limited Company or Sole Trader will be VAT registered
• Limited Company or Sole Trader will take advantage of Flat rate VAT
• Flat rate applied includes the benefit of the additional 1% applicable to the first year of VAT registration

Limited Company Conditions

• One director / one shareholder in a Personal Service Company
• Director of Personal Service Company elects to vote for 100% dividend after salary, costs and expenses
• Director's salary is maximum salary to the primary threshold for NI
• The Limited Company is trading normally i.e it is not subject to IR35 and is not a Managed Service Company

NOTES

• The Current tax rates are taken from the Fixed Data Table
• The current Value Added Tax Rate is 20% and is applied to all invoices and expenses as appropriate
• The Director's Salary is fixed in relation to National Insurance thresholds. Higher Rate Taxpayers should consider the advantages and disadvantages of a larger annual salary or bonus
• Higher Rate Taxpayers may wish to consider the advantages and disadvantages of shared ownership of their business
• Users with a tax code other than three digits and letter "L" may telephone or email our Development Department to request a detailed calculation
• Generally the use of an Umbrella rather than an Agency payroll is only efficient if sufficient weekly expenses are allowable and claimed
• The expenses claimed under an Umbrella should not prevent the proper operation of National Minimum Wage