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May 2020

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To May’s Further Coronavirus Advice.

The coronavirus (COVID-19) outbreak has brought an unprecedented array of challenges for businesses and their agents. Information is changing on an almost daily basis, making it difficult to keep up-to-date with business support measures and where to find the necessary guidance. Read More

So far we have reclaimed £109,000 for clients for their furloughed workers under the Coronavirus Job Retention Scheme.  if you’d like advice on the help that is available for your business at this difficult time just or give us a ring on 01422 847500.

May 2020
· Leave in a time of Coronavirus
· Check your Payroll!
· Coronavirus – Bounce Back Loan Scheme
· Working from Home?  How to claim Expenses
· May questions and answers
· May key tax dates
Leave in a time of Coronavirus
Q. Does Annual Leave accrue during furlough?  A. Yes, it does.

Q. Is the entitlement an average based on past entitlement? A. It can be an average or it can be a stated contractual entitlement.

Q. Is taking leave during furlough is acceptable? A.Yes, although it would in most cases seem to be a waste, as a furloughed employee is off work and getting paid anyway.

All this creates a problem – some staff who have been on furlough arrive back at work and seem to receive extra leave. Technically furlough is paid leave, but it is not paid annual holiday, so from a paid annual holiday perspective, the accrual and entitlement remains the same for both employees who continue to work and those who are furloughed.

Imagine you have a factory where some of the staff go on furlough.  Leave year is 01/01/20 – 31/12/20 – two days per month for all staff.  Leave accrued but not used at 31/03/20 is preserved during the course of the furlough.  The furlough employees go off on 1st April and after say after two months furlough, return on 1st June.    Do they get an extra four days leave not taken added to their leave cards? Those workers who have not been offered furlough in the same premises, have worked at the factory the whole time.  They don’t get extra leave added to their cards.  This seems unfair.  

The furloughed workers will not get the accrued days added on.  Their entitlement under furlough only mirrors their annual entitlement anyway.  Those who are still working, not furloughed, are also entitled to the same annual leave.  They have both been employed for the same duration and accrue whether they are working or furloughed, therefore the amount of accrual is the same. The issue is that there may be a perceived unfairness on the part of the people who have been working.  Their furloughed colleagues have had furlough time off and yet they continue to accrue holiday whilst on furlough. When the furloughed workers return in June they still have the same holiday to take as those who have been working all the time.

Q. Is there a way we can we force the furlough employees to take the leave that has accrued?  That way the furloughed workers will not get ‘extra’ leave. A. This isn’t easy to do – holiday is often contractually stated to only be taken at a time that is set by mutual agreement.

Drafted with the support of David Clark, our HR Advisor Associate.
Check your Payroll!
Coronavirus – Bounce Back Loan Scheme
Please always check your payslips and reports sent to you by Lorraine () & let her know of any changes promptly – even if the reports say ‘draft’.  

The obligation to check the payroll report lies with you.  Our standard terms and conditions include the following: ‘Signatories to HMRC returns cannot delegate their legal responsibility to others.  You agree to check that returns we have prepared for you are correct and complete before you approve them.’  It is therefore your responsibility to check that the wage bill that we are declaring is accurate and has actually been paid.  Similarly the furlough claim.  Note that the furlough claim figures and the payslips will often not agree for a whole variety of valid reasons.

Strictly under the Coronavirus Job Retention Scheme, the payroll should be submitted to HMRC before we do the furlough reclaims.
And note that even if you are expecting furlough reclaims from HMRC, it is still your responsibility to pay your staff and PAYE & NI on time. 

We generally do not redeclare wages from previous periods unless there has been a genuine misunderstanding about what has been paid.  We cannot be held accountable for errors that arise from a payroll where the employer has not checked the month end payroll report.  

These are tricky times.  We are often making claims of many thousands based on the payroll records that we make from your records.  Every one of our clients has records that could be subject to an investigation because of a mistake discovered in one client record.
The Bounce Back Loan Scheme will enable small businesses affected by the pandemic to borrow between £2,000 and £50,000 in an initiative described by the Chancellor as “an easy solution for those in need of smaller loans”. 

Businesses can apply for 25% of their turnover and the government will pay the interest for the first 12 months.  This loan will be available from 4th May and we are hoping to give those of our clients who may benefit, personalised guidance on how to exploit this scheme. 

The ideal is that businesses will only need to apply through a short, standardised online application and will get the loans within 24 hours of approval.  Apparently there will be no forward-looking tests of business viability; no complex eligibility criteria; just a simple, quick, standard form for businesses to fill in.  However we understand that to qualify the business must be able to claim that the turnover has been damaged by the lockdown (which is not the case with all businesses).

See more information
Working from Home? How to claim Expenses
If your employer requires you to work at home, you can claim for increased costs due to working from home, eg, heating and electricity. The best practice is to claim office rent from your employer.  You can apportion household costs to rent based on a template policy such as the one on our website at:

In practice, apportioning the cost and claiming rent can be complicated and may not be worthwhile for a short period. So instead an employee can claim a standard £6/week rate. This works in one of two ways:
•    Employers can pay you £6/week extra, free of tax.
•    If your business cannot afford to make this payment, you can claim tax relief on £6 of income per week, which for basic 20% taxpayers is £1.20/week (about £60/year), and higher 40% taxpayers £2.40/week (about £120/year). An employee can apply directly to HMRC for this tax relief – and as long as you are claiming relief on the equivalent of £6/week for the period you worked from home, you won’t have to provide evidence of the extra spending.

Just get in touch if you want to set up one of these arrangements for your employees.
May questions and answers top
May key tax dates top
Q. I am thinking of buying a new house that I will use as my main residence. I won’t sell my current home until I move into the new property. Will I have to pay the additional 3% stamp duty land tax (SDLT) change when I buy the new property? Answer

Q. I started trading on 1 September 2019 and am now thinking about completing my 2019/20 tax return. I have not incurred any capital expenditure and my turnover is less than the current VAT threshold. Should I use 31 March (or 5 April) as my accounting year-end? Answer

Q. How do I register as a self-employed subcontractor in the construction industry? Answer
2 – Last day for car change notifications in the quarter to 5 April – Use P46 Car

19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/5/2020

31 – Deadline for copies of P60 to be issued to employees for 2019/20

Need Help? top
New Clients Welcome top
Please contact us if we can help you with these or any other tax or accounts matters.

In addition, if there’s anyone else who you think would benefit from the newsletter, please forward the email to them or ask them to contact us to be added to the newsletter list.
If you are not already a client and are interested in becoming one, we would love to discuss how we can help and provide you with a competitive quote for our services.

See details of our Business Companion Service.
About Us top
Simple Accounting Limited offers a cost effective Business Companion service to business owners who use MYOB, Acclivity, Mamut, Solar Accounts, Quickbooks or Clearbooks.

‘All clients using these software packages can benefit from our support. Visit our website for a look at the resource on offer.’

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