23 March 2020 
Julia Ascott, Employment Taxes Specialist
As you will probably be aware, on Friday the Government announced a raft of assistance for businesses, focusing on:
HMRC’s guidance can be found here. Please note that some content is applicable to England only.
The Scottish Government guidelines can be found here.
The Welsh Government guidelines can be found here.
BUFDG have provided further analysis of these measures below and included relevant commentary or recommended action points for the HE sector. Please note that some of these measures may not directly be relevant to universities, but they may be of assistance to subsidiaries, tenants and contracted-out partners (such as caterers, security, cleaning, building services, leisure facilities, travel management companies, property managing agents, etc.) A PDF copy of this article can be accessed here; please share this document with interested parties.
If you have any questions, please contact Andrea (andrea@bufdg.ac.uk) or Julia (julia@bufdg.ac.uk).
Coronavirus Job Retention Scheme
The Government’s most audacious measure gives all employers in the UK access to funds to help them pay any employees who would have been laid off as a result of Coronavirus. The grant will apply to up to 80% of the employee’s salary (capped at £2,500 per month).
Whilst the technical details have not yet been issued, we understand that the scheme will work as follows:
Employers who are considering laying off workers should:
1. identify all affected employees – these should now be categorised as ‘furloughed’ workers.
BUFDG Commentary: this is a task that will involve all management within HE; who at your University is not carrying out any work due to Coronavirus and would you consider laying off, examples are staff working within catering, at leisure facilities or maintaining University grounds, but depending on your university’s activities, there may be others. These are the employees this measure will apply to;
2. tell these workers that their status has changed from an employee to a ‘furloughed’ worker.
BUFDG Commentary: this measure does not come without difficulties. In practical terms, HR will be responsible for telling the employees that their employment status has changed from an employee to a furloughed worker; how this needs to be done in practice is not clear but typically written confirmation is required. In addition, there is no detail as yet on whether this will affect individual’s employment rights but any change to status may invite negotiation. The upside is that the measures give the ability to pay an employee rather than lay them off; a positive for both sides that will hopefully help with any negotiations.
Submit information to HMRC regarding furloughed employees and their earnings.
BUFDG Commentary: It is not clear how this will work in practice as the Government have said they would introduce a new online portal. Given the amount of time that could take, it might be something that could be rooted within the existing Real Time Information system? We await HMRC’s confirmation.
Employer to make payment to employees and furloughed workers as normal
BUFDG Commentary – this is a reimbursement grant, not advance funding, HE’s will still have to have the cash to pay employees and workers. The Government have advised that if employers are struggling to pay their employees and workers, they should apply for a Coronavirus Business Interruption Loan. We expect universities will be in talks with their banks to ensure they have access to facilities.
HMRC will reimburse employers up to 80% of the furloughed worker’s normal pay, capped at £2,500 per month.
BUFDG Commentary: there is not yet a mechanism for repayments and HMRC are expected to make further announcements on this measure. It is likely that the first reimbursements will not be available until the end of April. Any HEIs who may be in financial difficulties and unable to secure bank facilities by the end of April should therefore consider:
This measure is expected to last at least 3 months, backdated from 1st March 2020 but may be extended further.
There are, of course, unknown technicalities until the Government issues further guidance. The questions we have include:
We will try to get this information to you as soon as we have it. If you have any further questions you would like clarified, please email julia@BUFDG.ac.uk.
Action required: consider whether you have any staff that you might consider laying off, if so could they instead be furloughed? Share with your colleagues and any other interested parties. Contact julia@bufdg.ac.uk if you have any queries.
VAT payments will be deferred from 20 March 2020 until 30 June 2020. Businesses will be given until the end of the 2021 tax year to pay any liabilities that arise. This scheme applies to all businesses and is automatic. No application to HMRC is required. HMRC will continue to refund VAT and make repayments to businesses.
Action required: Universities and their subsidiaries should continue to submit their VAT returns. If the VAT liability is paid by Direct Debit, consideration should be given to canceling the DD, or at least checking that any VAT payment due has not been automatically collected.
Time to pay arrangements can be agreed with HMRC on a case-by-case basis where a business has missed (or anticipates that it will miss) a tax payment, due to COVID-19. Businesses should contact HMRC on 0800 0159 559 to discuss a time to pay arrangement.
Action required: Please share this with interested parties.
This will apply to businesses with a turnover of no more than £45 million and covers loans up to £5 million. Further details are available on the British Business Bank website.
The Welsh Government website provides a link to the Development Bank of Wales here.
Action required: Please share this with interested parties.
There will be a full SSP refund available for small/medium employers (i.e. those with less than 250 employees at 28 February 2020) for employees who are unable to work due to Covid-19 and are paid SSP, for up to two weeks.
There will be no need for those employees to provide a fit note to get access to SSP, however, if employers insist, isolation notes are available on NHS 111 online and those employees with symptoms can get a note from the NHS website.
Anyone not eligible to receive sick pay, including those earning less than an average of £118 per week, some of those working in the gig economy, or self-employed people, is able to claim Universal Credit and or contributory Employment and Support Allowance .
Action required: If you still require fit notes, please share this information to employees and contractors/freelancers. Please also share with other interested parties.
The business rates holiday applies to the retail, hospitality and leisure businesses based in England. It may be relevant, for example, to universities with conference facilities in subsidiaries.
It covers a range of premises, such as shops, restaurants, cafes, and hotels, where they are used wholly or mainly for relevant activities. The full list can be found in HMRC’s guidance that has been issued to local authorities. This guidance also includes examples of how the relief will be calculated.
Nurseries based in England will also benefit from a business rates holiday, where the property is occupied by providers on Ofsted’s Early Years Register or where it is wholly or mainly used for the provision of the Early Years Foundation Stage.
The holiday will apply to the 2020 to 2021 tax year. No action is required by rate payers. Local authorities will issue (or reissue) the April 2020 bills to exclude the business rate charge.
Action required Please share this with the team within your organisation that is responsible for business rates. Where rates are paid, please monitor your April 2020 rates bills to ensure that the business rates holiday has been applied.
In Scotland, retail, hospitality and leisure businesses will get 100% relief, provided that a property is occupied. Further information will be provided here when available. All non-domestic properties will get a 1.6% rates relief, which will be applied to the rates bill by the local council.
In Wales, Retail, leisure and hospitality businesses with a rateable value of £51,000 or less will receive 100% business rates relief for the financial year 2020/21. No action is required by rate payers. Local authorities will issue bills to exclude the business rate charge.
Businesses in the retail, hospitality and leisure sectors based in England will be provided with a grant by their local authority as follows:
Local authorities will write to businesses who are eligible for the grant. Guidance for local authorities will be provided shortly.
In Scotland, retail, hospitality and leisure businesses with a rateable value between £18,000 and up to and including £51,000 will be able to apply for a one-off grant of £25,000. Information will be provided by Scotland’s Councils in due course.
In Wales, for retail, leisure and hospitality businesses with a rateable value of between £12,001 and £51,000, a grant of £25,000 will be offered. Information will be provided by Local Authorities in due course.
Action required: BUFDG will monitor this area and provide more information when available. In the meantime, please share this with interested parties.
Income Tax payments due on 31 July 2020 for self-employed workers who complete self-assessment tax returns, will be deferred until 31 January 2021. This scheme applies to all self-employed workers. No application to HMRC is required.
Action required: Please share this with interested parties.
A one-off grant of £10,000 will be provided to businesses
Local authorities will write to businesses who are eligible for the grant. Guidance for local authorities will be provided shortly.
Action required: BUFDG will monitor this area and provide more information when available. In the meantime, please share this with interested parties.
The Bank of England will buy short term debt from larger companies. Further information can be found here.
Action required: Please share this with interested parties.
