The Government announced some changes in last weeks’ budget, but these are changing and evolving day by day. The key highlights so far are as follows:
Statutory Sick Pay for Employees
Normal rules in a nutshell for Statutory Sick Pay (SSP) are:
- To qualify for SSP employees must:
- Have an employment contract
- Have done some work under this contract
- Have been sick for four or more days in a row
- Earn an average of at least £118 per week
- Give you the correct notice
- Give you proof of illness after 7 days off
- The first three days are unpaid (called “waiting days”) then SSP is paid from day four, providing the conditions above are met
- Employees can self-certify for sickness for the first week, but must provide a “fit note” from a doctor for any illness lasting longer than seven days
- SSP is an employers expense and cannot be reclaimed from HMRC
- SSP can be paid for a maximum of 28 weeks
There are other criteria which need to be taken into consideration and full details can be found at https://www.gov.uk/employers-sick-pay
NB: Employees with a zero-hours contract may still be entitled to SSP depending on their individual circumstances. If they are not entitled to SSP, they can apply for Universal Credit or Employment and Support Allowance
The new rules announced in the Budget last week now allows employees who are required to self-isolate due to Coronavirus to have SSP paid from day one. Up to two weeks of SSP can reclaimed from HMRC as long as the following criteria are met:
- The refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
- Employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020
- Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
- Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note
A couple of key points to note at this stage:
- How and when this money can be reclaimed has not been confirmed yet. The government will work with employers over the coming months to set up the repayment mechanism as soon as possible.
- If employees need to provide evidence to their employer that they need to stay at home due to coronavirus, they will be able to get this from NHS 111 Online instead of having to get a fit note from their doctor.
- KEY POINT: this is currently under development and will be made available soon.
Help for self-employed workers
Any self-employed workers who are required to self-isolate due to Coronavirus will not be eligible for SSP, and will need to apply for Universal Credit. This can be done at https://www.gov.uk/apply-universal-credit. Universal Credit is specific case by case and more details can be found at https://www.gov.uk/universal-credit, including an eligibility checker.
The new IR35 legislation that was due to come into play this April has now been postponed until April 2021. Please contact me directly if you need more information on this, however details are limited at the moment as it is a new announcement.
There have been a few different measures announced by the Government to help support businesses:
- The Coronavirus Business Interruption Loan Scheme – A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch next week to support businesses to access bank lending and overdrafts. The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value. Businesses can access the first 6 months of that finance interest free, as government will cover the first 6 months of interest payments.
- Support for businesses paying tax – All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.
- Support for businesses that pay little or no business rates – The government will provide additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR). This will provide a one-off grant of £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs.
- KEY POINT: If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority – you do not need to apply.
- Funding for the scheme will be provided to local authorities by the government in early April. Guidance for local authorities on the scheme will be provided shortly.
I will be keeping an eye out for further updates, and will update where possible, however I would encourage all clients to keep an eye on HMRC’s website at https://www.gov.uk/government/topical-events/coronavirus-covid-19-uk-government-response. Regular updates as and when they happen are being uploaded to the website and contain all the information currently available.