Furlough Scheme Eligibility
HMRC's official stance on whether a business can claim furlough for employees;
If your employer cannot maintain their workforce because their operations have been affected by coronavirus (COVID-19), they can put you on furlough and apply for a grant to cover a portion of your usual monthly wage costs (only for time you’re on furlough). Our interpretation of an employer not being able to maintain its workforce, and how this would affect a business, could come in the form of the following;
- Supply chain being interrupted due to COVID, and thus not being able to provide the service or goods you would usually.
- The restrictions affecting the supply of service, ie. hospitality sector and businesses affected by the local lockdowns.
- Employees shielding due to personal circumstances
- Drop in turnover, due to various reasons but generally in response to the pandemic
If your business is not financially affected by any of the restrictions, ie. if you are managing to provide a remote service, or are working from home and have adjusted your business model to ensure you are still generating the same income, then claiming furlough in this position would not be in keeping with the conditions of the scheme.
We have been advised by our regulatory body that HMRC will have an aggressive approach to the investigation and penalty structure to punish anyone found to be abusing the scheme, and a penalty of 100% of the overclaimed furlough will be charged. This will apply to anyone who has overclaimed and not returned funds.
So whilst we encourage you to claim what you are due if you feel your business has been affected, we would ask that you can be sure your financial position reinforces the impact that COVID has had on your business. Please feel free to get in touch if you would like to discuss your personal situation in more detail.
Self Assessment Reminder - TAX DUE!
A reminder that your Self Assessment tax is still due in January 2021. There was a deferral on the July 2020 payment on account, this was extended until January 2021, which means this along with any balancing payment for the 19-20 tax return will still be due in January 2021 as normal. HMRC accept that this year has brought financial challenges, and if you are unable to make you payment in full by January 2021, you can apply online to set up a payment plan here, via your personal tax account, so long as your outstanding balance does not exceed £30,000. Usually HMRC will have a maximum term of 12 months on any repayment plans accepted for income tax repayments.