Latest changes Financial with regards to Covid-19: By Matt Bryant, Zig Zag Chartered Accountants

We asked Matt Bryant from ZigZag Accounting to update us on the current financial aspects surrounding the Impact of the Coronavirus on the Hospitality Industry. Further links can be found at the bottom of this post.

Job retention     

Changes:

  • The government is moving towards phasing out the Job Retention scheme entirely with the likely changes being:
    • Closure of the scheme to new entrants from 30 June
    • From 1 July, allowing furloughed employees to return to part-time work
    • From 1 August, removal of the element of grant that covers employer’s National Insurance and pension contributions
    • From 1 September, employer contributes 10% of the 80% furlough pay (government pays 70%)
    • From 1 October, employer contributes 20% of the 80% furlough pay (government pays 60%)
    • Eventual closure of the scheme on 31 October 2020
  • These amendments are not yet finalised

Extension of the scheme

  • The scheme is being extended to 31 October 2020 at the 80% grant rate
  • From 1 August 2020 employers will be able to return furloughed employees to work on a part-time basis while still retaining some level of grant
  • Where employees return to work on a part-time basis, the employer must contribute a percentage towards the employee’s pay so that the employee receives at least 80% of their reference pay.

You can find this guidance by searching for ‘Coronavirus Job Retention Scheme’ on GOV‌‌.UK.

What the new online guidance covers

The guidance includes:

  • changes to the scheme and key dates that you need to be aware of
  • how you can claim if you bring previously furloughed employees back to work part-time from 1‌‌ July (known as flexible furloughing) and how many employees you can claim for in any one claim
  • how to claim, and the information you’ll need to do so
  • how to work out how much you can claim, including an online calculator to help you
  • more information on amending your claim.

What you need to do from July

  • start your flexible furloughing of employees from 1‌‌ July onwards. You can decide the hours and shift patterns they work to suit the needs of your business – you’ll pay their wages for the time they’re in work and can apply for a job retention scheme grant to cover any of their usual hours they are still furloughed for. You can still keep employees on full furlough if you need to
  • claim for periods ending on or before 30‌‌ June, by 31‌‌ J‌ul‌y – this is the last date you can make those claims
  • claim for further furlough periods as needed – the first time you will be able to make a claim for days in July will be 1‌‌ July.
  • If you want to furlough any employee from 1st July to 31st October on the ‘new’ flexible furlough scheme, they must have furloughed that particular employee at some point on this first scheme up to 30th June for the 3 week minimum.  This is the same for any employees currently on Mat Leave etc. They can be furloughed and on mat leave at the same time.
  • Remember that new consent letters may be required with employees from 1st July if the first letter had an end date of 30th June.  This is due to changing their T&Cs and compliance with employment law.
  • There will be more details available (and hopefully it will be live) of the amendment tool for overclaims from Friday 12th June.  However HMRC have confirmed that underclaims need to be dealt with via the telephone helpline.  The Amendment tool will only be for previous overclaims.

Self employed & partnerships

Changes:

  • The government is moving towards an extension to the self-employ scheme with the likely changes being:
    • Closure of the first grant scheme from 14 July 2020
    • From 1 August, a grant claim equivalent to 70% of average monthly trading profits
    • Maximum claim of £2,190 per month (down from £2,500) for up to three months
    • Available even if a claim was not made under the first grant scheme
    • Eventual closure of the scheme on 31 October 2020
  • These amendments are not yet finalised

CBILS & BBLS

British Business Bank have now updated their FAQs to confirm that a BBL can be ‘upgraded’ to CBIL (if the business meets the underwriting criteria for that CBIL) – look here at the answer to the question “What are the options if I need further finance down the line?”

Grants

  • Hearing that there is some confusion about the new LA Discretionary Grants Funds.  Each LA is offering a slightly different scheme so check the criteria with your LA.

 

ZigZag have launched a Rebound and Recover Programme. The aim is to start businesses to start focusing on being able to move forward in these uncertain time and at the same time be ahead of the competition. They have run this past a few clients and potential clients before we launch and feed back has been positive.

As accountants and advisors, we need to be helping clients more than ever. Whilst there is a cost involved those that have seen the beta version see it as an investment not a cost.

 

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