Updated Information on how small businesses and the self-employed can weather Covid 19 – March 28th, 2020

I want to try and keep the information as clear and as simple as I possibly can for everyone, so I won’t be writing out everything again, I will just be writing out the highlights.

1) HMRC have provided additional guidance on what expenses are taxable if your employee is working from home due to Covid-19. Employees who are affected are those who are working from home because your workplace has closed or they are self-isolating due to the advice from the government. Furloughed Workers who are eligible for the Coronavirus Job Retention Scheme are not eligible. There are actually quite a lot of restrictions as to what can be claimed and what can’t be claimed:

– if the employee already has a broadband connection at home and pays for it then they cannot claim this as a taxable expense, however, if the connection doesn’t exist already and is needed for the employee to work from home, the fee can be reimbursed by you and is non-taxable; any private use must be limited
– laptop/tablets/computers/office supplies – if these are mainly used for business purposes and not significant private use, these are non-taxable.
– if the employee has to buy office equipment in order to be able to do their job from home these are taxable and should be reported on your PAYE settlement agreements
– electricity/heating/broadband – payments or reimbursements to your employees of up to £4.00/week (£6.00/week from 06/04/2020) is non-taxable for the addional household expenses incurred; if the claim is above this amount, the employee needs to check with you beforehand to see if you will make the payments and keep the receipts
– if your employee needs to self-isolate but can’t do that in their home, you can reimburse them for hotel expenses and subsistence costs which are taxable
– use of employees own vehicle for business can be reimbursed at the approved mileage allowance rates free of tax and NI; if you don’t pay mileage allowance the employee can claim tax relief through their Personal Tax Account
– you don’t have to keep detailed records of every instance of private use to prove your claim for exemption
To read more about the rules around significant personal use and how to report the information to HMRC, you can read about the specific guidance here: https://www.gov.uk/guidance/check-which-expenses-are-taxable-if-your-employee-works-from-home-due-to-coronavirus-covid-19

2) HMRC have relaxed the rules on carrying over annual leave due to Covid-19

The government is going to amend the regulations to allow annual leave for all employees affected by Covid-19 to be carried over into the next 2 years. The new regulations will allow up to 4 weeks of unused annual leave to be carried over and used over the next 2 years, making it easier for businesses to meet the requirements of ensuring workers take the statutory amount of annual leave in any year. This will amend the Working Time Regulations which apply to almost all workers including agency workers, those who work irregular hours, and workers on zero-hour contracts. The full article can be seen here: https://www.gov.uk/government/news/rules-on-carrying-over-annual-leave-to-be-relaxed-to-support-key-industries-during-covid-19

3) Self-employed scheme

For those who have not yet submitted their Income Tax Self-Assessment Tax Returns for the 2018/2019 tax year, you must do this by 23/04/2020 in order to be eligible for the scheme.

If you claim tax credits, you will need to include the grant in your claim as income.

I will be doing some fb lives next week on the self-employed support scheme, the job retention scheme, as well as a more general one to cover all of the support available to businesses, so keep an eye out for those on the FaceBook page. I will also be putting together some fact sheets about each of the schemes available so that all of the information is in one place.

The information and policies are continually being updated by the government, so I urge you to keep on top of the information by visiting the relevant website for your area.

UK:
https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
Scotland: https://www.gov.scot/coronavirus-covid-19/
Wales: https://gov.wales/business-and-employers-coronavirus
Northern Ireland: https://www.nibusinessinfo.co.uk/

I will be trying to keep myself as informed as possible and will share relevant information on my fb business page: https://www.facebook.com/ihelmenterprises/

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