Coronavirus has caused untold disruption to economies, businesses and how we carry on our everyday lives. New demands have been placed on some organisations, especially pharmacies, while others have been ordered to close. Nothing is simple any more. Government and its subsidiary bodies have reacted to the crisis with new programmes and changes to routine. Their responses are subject to frequent change, so while the information below is current at the time of writing, please follow the links to the appropriate websites for the latest position.
Coronavirus has changed the rules that apply to statutory sick pay (SSP) for employees who are eligible. Those covered are entitled to £95.85 per week if they are too ill to work, for up to 28 weeks. SSP is normally paid after someone has been off for four or more days in a row; it is now payable from day one.
Small and medium-sized employers need to apply to HMRC to recover the costs of paying coronavirus-related SSP. The repayment will cover up to two weeks of SSP and is payable if an employee is unable to work because they have coronavirus; are self-isolating and unable to work from home, or are shielding because they’ve been advised that they’re at high risk of severe illness from coronavirus.
Holiday entitlement and pay during coronavirus (Covid-19), published by the Department for Business, Energy & Industrial Strategy, details how holiday pay should be calculated during the pandemic, how the rules interact with furloughing under the Coronavirus Job Retention Scheme, and special statutory changes relating to carry-over of holiday.
...for vulnerable people, revised
Acas has revised its guidance on vulnerable working people in the document Coronavirus (Covid19): advice for employers and employees. There is now extra wording regarding putting people who are shielding on furlough under the Coronavirus Job Retention Scheme. The guidance had already stated that such people should stay at home for at least 12 weeks from when they received a letter telling them to start shielding, and talk to their employer as soon as they could if they had been told to start shielding or thought they might get a letter telling them to do so. On 23 April, two further paragraphs were introduced, suggesting that vulnerable people should ask to be furloughed if they cannot work from home. The revised guidance also notes that details about their medical condition must be kept confidential, unless the employee says it can be shared.
… on improving workers’ mental wellbeing
Acas has also published Coronavirus and mental health at work, which looks at the impact of coronavirus on workers’ mental wellbeing. The guidance covers mental health with respect to individuals, supporting other staff members and managing the workplace, and includes links to external resources.
MOTs due from 30 March 2020 Owners of cars, motorcycles, light vans and other light vehicles were granted a six-month exemption from MOT testing from 30 March. Vehicles must be kept in a roadworthy condition; a fine of up to £2,500, a driving ban and three penalty points awaits those driving a vehicle in a dangerous condition. The Department for Transport has said the exemption won’t affect insurance claims because they will be effectively extending MOT certificates, meaning they will remain valid for insurance purposes. The extension also applies to vehicles that were due their first MOT test on or after 30 March and is automatic. A temporary paper MOT certificate with the new expiry date will not be sent.
Despite the new rules, it makes sense to check that the MOT expiry date has been extended via and most certainly before a vehicle is taxed. It is still permissible to take a vehicle to be repaired at the nearest open garage if it’s unsafe.
Deferral of VAT payments
Ordinarily, VAT is due to be paid to HMRC one month and seven days after a VAT quarter has ended. While some businesses have the funds to pay what is due, many don’t, and the Government has changed the regime to allow for VAT payments due between 20 March and 30 June 2020 to be either paid as normal or deferred until 31 March 2021.
Businesses that choose to defer paying VAT do not need to tell HMRC; the delay will be accepted automatically. However, they will need to contact their bank to cancel any direct debit. HMRC has said that it will not charge interest or penalties on any amount deferred. However, businesses will still need to submit their VAT returns on time. It goes without saying that VAT due following the end of the deferral period must be paid as normal.
As pharmacies recover more than they pay, it may be helpful to know that, despite the deferral process, HMRC will continue processing VAT reclaims and refunds normally.
New exemption for coronavirus-related reimbursed home office expenses
For those with staff working from home, a temporary exemption for tax and National Insurance has been announced for expenses reimbursed by employers for home office equipment. This temporary exemption will ensure that no tax liability arises where employers reimburse employees’ personal expenditure on home office equipment arising from arrangements to work from home during the coronavirus outbreak. The relevant regulations are effective from 16 March 2020 until the end of the tax year 2020/21.
Given that coronavirus has changed the business landscape somewhat, how firms compile, sign and submit accounts to Companies House should be considered, especially if more time is required.
Companies House has closed some of its offices and suspended all same-day services. As the London office is closed, companies registered in England and Wales should send filings directly to the Cardiff office. Scotland and Northern Ireland are unaffected. Companies House has said that it will accept good photocopies of signed accounts, but if paper filing proves difficult to arrange, smaller and audit-exempt companies should consider whether online WebFiling may be an alternative. This does require manual entry to an online template and the person submitting the figures must be registered for WebFiling, which takes time to set up.
The compulsory striking off process is on-hold as of 16 April. This means companies won’t be placed into the dissolution process for failing to submit accounts and/or confirmation statements within four weeks of the filing deadline. This should provide businesses with more time to bring records up to date during the emergency.
Time to pay
HMRC’s Time to Pay was used with great success during the financial crisis of 2008, and it can help those in temporary financial distress because of coronavirus by allowing them to establish an agreement to pay taxes that are due over a period of time. To take advantage, taxpayers must contact HMRC as soon as possible – especially if they have missed a payment. Interest will still be due, but penalties can be avoided if timely contact with HMRC is made. HMRC is also allowing automatic delays to 31 January 2021 of self-assessment income tax payments on account that are due by 31 July 2020. If the total income tax bill is less than £10,000 and cannot be paid in one go, instalments can be set up online. There is no need to contact HMRC if a payment plan has been set up online. For more information, there is a Helpline on 0300 200 3822.
Taxes in general
For help with any (other) taxes, including employers’ PAYE, Corporation Tax, self-assessment or VAT, where payment is difficult or a payment demand, such as a tax bill or a letter threatening legal action, has been received, HMRC’s advice is to call the office that sent it. Alternatively, the HMRC Coronavirus helpline on 0800 024 1222 may be able to assist.
The extension is not automatic and companies seeking more time must complete an online application
Businesses that are incorporated (limited companies or limited liability partnerships) should consider the practicalities of filing accounts because of coronavirus restrictions.
To stay on the register of companies and remain in business as a limited company means filing returns to Companies House. However, the body notes the problems that coronavirus is causing and has said that from 25 March, businesses may apply for a three-month extension to file their accounts.
Unlike the extension to VAT payments, the extension is not automatic and companies seeking more time must complete an online application before the filing deadline. That said, those claiming an extension on the basis of ‘issues around Covid-19’ or ‘health matters’ will be automatically and immediately granted three months’ extension.
No further evidence is required. Companies that have already extended their filing deadline, or shortened their accounting reference period, are not guaranteed a filing extension.
Where there is any risk the deadline could be missed, an extension should be applied for because late filing penalties are imposed automatically – this is especially relevant to companies whose accounts are filed late two years in a row as penalties double in the second year.
Late filing penalties can be appealed. There are policies in place to deal with appeals that rely on unforeseen poor health; each appeal is treated on a case by case basis.