CPA Bulletin

www.cpa.uk.net CPA Bulletin > May 2020 23 POLICY: 2 • The scheme is open to companies that: • Are UK-based in its business activity • Have an annual turnover between £45 million and £500 million • Be unable to secure regular commercial financing • Have a borrowing proposal which the lender: a) would consider viable, were it not for the COVID-19 pandemic b) believes will enable you to trade out of any short-term to medium-term difficulty. The scheme is available to a range of accredited lenders. CORONAVIRUS JOB RETENTION SCHEME www.businesssupport.gov.uk/coronavirus-job-retention-scheme/ Under the scheme, all UK employers with a PAYE scheme that was created and started on or before 28th February 2020, are able to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off. This applies to employees who have been asked to stop working, but who are being kept on the payroll - ‘furloughed workers’. HMRC will pay employers a grant worth 80% of an employee’s usual wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage. This is to safeguard workers from being made redundant. The scheme will cover the cost of wages backdated to 1st March if applicable and is initially open for 3 months, but will be extended if necessary. The employer must have a UK bank account. To access it, companies will have to contact employees who are to be furloughed and notify them of the change in their employment status. The scheme was expected to be up and running by the end of April. The CPA have already issued a guide letter for employers to follow. SUPPORT FOR THE SELF-EMPLOYED www.businesssupport.gov.uk/self-employment-income-support- scheme/ • The Self Employment Income Support Scheme (SEISS) will support self-employed individuals (and those in partnerships) whose income has been affected by the impact of the Coronavirus pandemic. The scheme will provide a grant to self-employed individuals or partnerships, worth 80% of their profits up to a cap of £2,500 per month. HMRC will use the average profits from tax returns in 2016-17, 2017-18 and 2018-19 to calculate the size of the grant. The scheme will be open to those where the majority of their income comes from self-employment and who have profits of less than £50,000. The scheme will be open for an initial 3 months with people able to make their first claim by the beginning of June. To be eligible for the scheme, the individual must meet all the criteria below: • Be self-employed or a member of partnership; • Have lost trading/partnership trading profits due to COVID-19; • File a tax return for 2018-19 as self-employed or a member of a trading partnership. Those who have not yet filed for 2018-19 will have an additional 4 weeks from this announcement to do so; • Have traded in 2019-20; be currently trading at the point of application (or would be except for COVID 19) and intend to continue to trade in the tax year 2020 to 2021 • Have trading profits of less than £50,000 and more than half of your total income come from self-employment. This can be with reference to at least one of the following conditions: • Your trading profits and total income in 2018/19 • Your average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19. Please note - HMRC will check whether individuals meet the criteria – people do not have to contact them as they will have all the information readily available. To access the various support measures in place and to find out further information, the government has created a one stop hub to provide more information. Please go to www.gov.uk/coronavirus/ business-support for further details. These represent the main set of initiatives and schemes the government is currently running. They are subject to review and change by the government at any point and members are encouraged to check with the website for the latest developments and any changes. The March budget saw the Chancellor announce that tax relief on red diesel would be scrapped. The longstanding rebate which is in place for non-road mobile machinery in relation to construction and agriculture sector, costs the Treasury around £2.4bn a year and would primarily apply to the construction sector. The CPA wrote to the Chancellor at the end of February, outlining our concerns on the impact this move would have on the construction sector, as well as the mixed messages it would send for companies looking to change their fleet and lower emissions. The letter to the Chancellor highlighted: • That scrapping the red diesel subsidy would cut levels of investment in new cleaner technology • Impact even further on wafer thin profit margins • Create uncertainty amongst the construction sector in how the government values its contribution. The last point is especially relevant now, at a time when the economic recovery in construction has now been reversed due to the Coronavirus epidemic and the operating procedures and additional costs companies are having to face as they try to adapt to the new reality. In the post Coronavirus economy, the construction sector will continue to face immense economic hardship as it struggles to get back on to an even keel. Adding to current costs through this measure will undermine confidence even further. The changes to red diesel duty will not come into effect for another two years, although in the current climate and due to the pressures on the industry from the Coronavirus outbreak, the move might be delayed further. At the time of writing, the CPA will be meeting with a team at the Treasury to discuss the Chancellor’s move and what it means for companies operating in the plant-hire sector, ahead of the formal consultation period starting. March Budget sees red diesel rebate scrapped