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There are clear changes in the position with regard to Coronavirus restrictive measures now, which will be very obvious to everyone. Retail stores have been able to open again, which has been a specific recent change of significance. In addition, though, the Government have announced today that they have moved the COID-19 alert level to 3. This would appear to be a clear sign that the Government are not expecting any major shifts in the data on the spread of the virus, and means the Government under the alert measures can continue to increase the gradual relaxation of restrictions. Other information coming out today would also suggest the within the UK, there could be an opening up of certain types of holiday accommodation over the next few weeks as well.

All of this has got to be good news for the business community and the economy, as long as there is no full second wave of the virus. The Government suggests they think there may be localised outbreaks, and suggested they think these are likely.

It will be interesting to see over the coming months and into next year how the working practices of business change. Some statistics recently released from the latest Business Impact of Coronavirus (COVID-19) Survey (BICS), show 30% of the workforce were on furlough, and 42% of businesses were topping up workers’ pay. Also, according to the latest Opinions and Lifestyle Survey (OPN), nearly half of all working adults (49%) had worked from home between 11 and 14 June 2020, an increase from 41% the previous week; this supplemented results from BICS, which showed that 5% of the workforce had returned from furlough leave between 18 May and 14 June 2020.

Other updates to be aware of are as follows:

Coronavirus Job Retention Scheme (CJRS)

As per my previous update on this area, the CJRS is changing from 1 July 2020. Given the we are moving closer to this date, businesses should be considering how the changes will impact them, and what that means in terms of the working times employees may be needed for. There are also some practical points leading up to the transition and crossing over the 1 July point, and so it seems useful to summarise the main points for pre and post 1 July 2020 below.

Working time for Employees

Prior to 1 July 2020, employees on furlough cannot undertake any work for you other than training. From 1 July, you will be able to:
• only be able to claim for employees who have previously been furloughed for at least 3 consecutive weeks taking place any time between 1 March and 30 June 2020
• be able to flexibly furlough employees – this means you can bring your employees back to work for any amount of time, and any work pattern
• still be able to claim the furlough grant for the hours your flexibly furloughed employees do not work, compared to the hours they would normally have worked in that period.

If you flexibly furlough employees, you’ll need to agree this with the employee (or reach collective agreement with a trade union) and keep a new written agreement that confirms the new furlough arrangement. You’ll need to:
• make sure that the agreement is consistent with employment, equality and discrimination laws
• keep a written record of the agreement for 5 years
• keep records of how many hours your employees work and the number of hours they are furloughed (i.e. not working).

You do not need to place all your employees on furlough and you can continue to fully furlough employees if you wish. Employees cannot undertake any work for you during time that you record them as being on furlough.

Using minimum furlough periods

Until 1 July 2020, any employees you place on furlough must be furloughed for a minimum of 3 consecutive weeks. When they return to work, they must be taken off furlough. Employees can be furloughed more than once, but they must be furloughed for a minimum of 3 consecutive weeks each time they are furloughed.

From 1 July, agreed flexible furlough agreements can last any amount of time. Employees can enter into a flexible furlough agreement more than once.

Where a previously furloughed employee starts a new furlough period before 1 July this furlough period must be for a minimum of 3 consecutive weeks. This is the case regardless of whether the 3 consecutive week minimum period ends before or after 1 July.
For example, a previously furloughed employee can start a new furlough period on 22 June which would have to continue for at least 3 consecutive weeks ending on or after 12 July. After this the employee can then be flexibly furloughed for any period.

In relation to the claims, after 1 July, employers cannot make claims that cross calendar months, so the employer will need to make a separate claim for the period up to 30 June. This is an important practical point in that given 1 July falls on a Wednesday, weekly paid staff will straddle the month end, and so the furlough claim calculation will need to be split.

Although flexible furlough agreements can last any amount of time, unless otherwise specified the period that you claim for must be for a minimum claim period of 7 calendar days.

When your employees are on furlough

The rules in this area have not changed. However, as a reminder, during hours which you record your employee as being on furlough, you cannot ask them to do any work for you that:
• makes money for your organisation or any organisation linked or associated with your organisation
• provides services for your organisation or any organisation linked or associated with your organisation

Your employee can:

• take part in training
• volunteer for another employer or organisation
• work for another employer (if contractually allowed)

Paying employee taxes and pension contributions

Again, there is no change in the position on taxes and pension contributions. Employees will still pay the taxes they normally pay out of their wages. Until 31 July you can continue to claim for these costs for the hours the employee is on furlough. From 1 August, as previously reported, employers will be required to pay all employer NICs and pension contributions.

Keeping employee rights

Again, there is no change in this area, and employees still have the same rights at work, including:
• Statutory Sick Pay
• annual leave
• maternity and other parental rights
• rights against unfair dismissal
• redundancy payments

The guidance also makes a point of highlighting that grants cannot be used to substitute redundancy payments, and also that HMRC will continue to monitor businesses after the scheme has closed.

Deferral of VAT

There has been the ability to defer VAT payments due between 20th March and 30 June 2020. However The VAT payment deferral period ends on 30 June 2020. This means you will need to:
• set-up cancelled direct debits in enough time for HMRC to take payment
• submit VAT returns as normal, and on time
• pay the VAT in full on payments due after 30 June
Any VAT payments you have deferred between 20 March and 30 June should be paid in full on or before 31 March 2021. You can make additional payments with subsequent returns.

As always, please get in touch with us if you have any queries on the above.

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Clarke Nicklin House, Brooks Drive, Cheadle Royal Business Park, Cheadle, Cheshire, SK8 3TD. Registered Number OC309225.
The firm is registered to carry on audit work in the UK & Ireland. Details about our audit registration can be viewed at www.auditregister.org.uk under reference number C001178544. The professional rules applicable are the Audit Regulations and Guidance which can be found at www.icaew.com/regulations, and the International Standards on Auditing (UK and Ireland) which can be found at www.frc.org.uk/apb/publications/isa.cfm.