Tag Archive for furlough

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Taxman could claw back up to 10% of furlough cash

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By Timothy Adler on Small Business – Advice and Ideas for UK Small Businesses and SMEs

The taxman could claw back up to 10 per cent of all furlough cash from small businesses unaware they have overclaimed.

HMRC and the National Audit Office estimate between 5 per cent and 10 per cent of the total furlough money claimed could represent overclaims.

The Government is due to have spent over £70bn on furlough once the scheme ends on 30 September, nearly double the total UK defence spend in 2019/19.

>See also: This change to the furlough scheme could lead to more costly redundancies

At its peak 8.9m people were on furlough; the latest figure is 1.9m.

Nigel Morris, employment tax director at MHA, says innocent errors and incorrect claims will be pursued for many years by HMRC. He advises small businesses check their claims in detail, now that furlough is winding down. They should repay any overclaims through the Government’s own website before HMRC hits them with interest and penalties.

The most common administrative slip-up made by companies has been forgetting to work out claims for flexible furlough on calendar days (365 per annum) and have instead used working days (260 per annum), which they might use for

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Hot Business News Today

Taxman could claw back up to 10% of furlough cash

by  •  • 0 Comments

By Timothy Adler on Small Business – Advice and Ideas for UK Small Businesses and SMEs

The taxman could claw back up to 10 per cent of all furlough cash from small businesses unaware they have overclaimed.

HMRC and the National Audit Office estimate between 5 per cent and 10 per cent of the total furlough money claimed could represent overclaims.

The Government is due to have spent over £70bn on furlough once the scheme ends on 30 September, nearly double the total UK defence spend in 2019/19.

>See also: This change to the furlough scheme could lead to more costly redundancies

At its peak 8.9m people were on furlough; the latest figure is 1.9m.

Nigel Morris, employment tax director at MHA, says innocent errors and incorrect claims will be pursued for many years by HMRC. He advises small businesses check their claims in detail, now that furlough is winding down. They should repay any overclaims through the Government’s own website before HMRC hits them with interest and penalties.

The most common administrative slip-up made by companies has been forgetting to work out claims for flexible furlough on calendar days (365 per annum) and have instead used working days (260 per annum), which they might use for

Read more...

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Small business calls for support extension to match reopening delay

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Originally written by Timothy Adler on Small Business
Small business associations have called for support to be extended to match any delay in reopening due to current lockdown restrictions.
The final easing of lockdown restrictions is set to be postponed beyond June 21, according to reports. Most current rules will remain in place.
However, from July 1, businesses are due to contribute 10 per cent of staff wages in a staged withdrawal of furlough, which is set to finish at the end of September. And a moratorium on evictions and debt collection from commercial tenants is due to lift on June 30.
>See also: Swap Bounce Back debt for employee equity, say industry experts
The worry is that without more taxpayer support already vulnerable small businesses will close completely.
Organisations including the Federation of Small Businesses, UK Hospitality and British Chambers of Commerce said they were poised to demand help such as loan forbearance, more generous furlough terms, and an extension to an eviction ban and business rates holiday.
Most hospitaly venues are still losing money, are buried under a mountain of debt, and consider any delay to the lockdown easing timetable as a grave threat to the industry with hundreds of thousands of jobs at risk.

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Hot Business News Today

Small business calls for support extension to match reopening delay

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Originally written by Timothy Adler on Small Business
Small business associations have called for support to be extended to match any delay in reopening due to current lockdown restrictions.
The final easing of lockdown restrictions is set to be postponed beyond June 21, according to reports. Most current rules will remain in place.
However, from July 1, businesses are due to contribute 10 per cent of staff wages in a staged withdrawal of furlough, which is set to finish at the end of September. And a moratorium on evictions and debt collection from commercial tenants is due to lift on June 30.
>See also: Swap Bounce Back debt for employee equity, say industry experts
The worry is that without more taxpayer support already vulnerable small businesses will close completely.
Organisations including the Federation of Small Businesses, UK Hospitality and British Chambers of Commerce said they were poised to demand help such as loan forbearance, more generous furlough terms, and an extension to an eviction ban and business rates holiday.
Most hospitaly venues are still losing money, are buried under a mountain of debt, and consider any delay to the lockdown easing timetable as a grave threat to the industry with hundreds of thousands of jobs at risk.

Read more...

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Rishi Sunak eyes subsidising wages of part-time workers

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Originally written by Timothy Adler on Small Business
Rishi Sunak is eyeing replacing furlough with subsidising wages of workers who work on a part-time basis.
The idea is one of several being considered by the chancellor and his Treasury, according to the Financial Times.
The attraction of subsidising wages is that it would support those who are in work but with not enough demand to keep them on five days a week.
>See also: Boris must ‘act now’ to save businesses from going under
The scheme would be aimed at businesses who can afford to employ staff for at least 50 per cent of their normal hours.
The Confederation of British Industry (CBI) and the Trades Union Congress (TUC) have both proposed similar schemes to replace furlough when it ends next month.
The CBI-style wage subsidy scheme would see small businesses paying employees in full for the days they work; the government would pay one third of the wages for those days the employee is off work, the employer would pay one third, and the employee would take a one-third pay cut on the days they are off work. That way, all three share the pain.
The other attraction is that it would be a lot cheaper than

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How to deal with a furloughed employee who refuses to return to work

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Originally written by Molly Dilling on Small Business
Across the country tens of thousands of employees are being asked to return to work. But many  employers are faced with a furloughed employee who refuses. The most obvious parallel is in schools, where unions, local councils, parents and teachers fundamentally disagree on how and when to reopen.
Similar stories are emerging about employers and staff, in sectors large and small, across the country. What rights do employers have in such cases, and how do you protect yourself against a detriment/dismissal claim?
Can a furloughed employee refuse to return to work?
The issue many employers are grappling with is whether a furloughed employee who refuses to return to work because of a stated fear of catching coronavirus can be dismissed.
Under the standard employment contract, the furloughed employee is obliged to follow reasonable instructions. One of those instructions contained in the employment contract will be that employees are to attend work within the hours set out.
The key issue in employment law is what is reasonable, and this depends on the precise facts of the case. As a result of the possible ambiguity an employer should carefully consider potential consequences before taking any disciplinary action for failure to

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New entrants to be stopped from joining the jobs furlough scheme

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Originally written by Timothy Adler on Small Business
Rishi Sunak is to stop new applicants from joining the jobs furlough scheme, in a bid to continue winding the scheme down.
Part-time working from furloughed staff is expected to be allowed from August, following pressure from MPs and retail associations. The government has announced that non-essential shops can reopen from June 15.
However, according to the Financial Times, the chancellor wants to stop new applicants from joining the Coronavirus Job Retention Scheme (CJRS) to stop them from going on furlough and immediately coming back off it to work part-time – leaving the Treasury to pick up the bill.
>See also: Government launches business Coronavirus Job Retention Scheme
Mr Sunak is expected to announce changes to the jobs furlough scheme including asking small businesses to cover 20 per cent of the cost of the CJRS, as well as allowing part-time furlough, by the end of this week.
Currently, 8m people are on furlough, roughly a quarter of the total jobs in Britain.
A quarter of company directors surveyed by the Institute of Directors say they won’t be able to afford to pay even the 20 per cent of the furlough scheme if asked – as well as having to

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Small businesses could have to cover up to one third of furlough cost

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Originally written by Timothy Adler on Small Business
Rishi Sunak is set to announce this week that small businesses will have to cover anything between 20-30 per cent of the cost of furlough.
Meaning that small businesses will have to fork out £833 per month to keep each staff member on furlough if they’re claiming the full £2,500 amount.
And small business owners will also have to pick up the cost of national insurance contributions on top, on average 5 per cent of wages, says the Times.
According to accountancy firm Wellers, this would cost an additional £245.73 per month, bringing the monthly total for each furloughed employee to over £1,000 a month.
However, the government will still cover the cost of pension contributions. Previously, Bloomberg reported that the Treasury was considering asking businesses to cover both national insurance and pensions.
>See also: Rishi Sunak extends job retention furlough scheme to October
What’s being floated today goes much further.
Unemployment scrapheap
The fear is that many small businesses, especially those in leisure and hospitality, will be forced to throw staff onto the unemployment scrapheap, as the Treasury effectively ends the Coronavirus Job Retention Scheme (CJRS) in August, not October.
The hospitality sector, which will be the very last sector to reopen,

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Businesses may have to cover insurance and pensions of furloughed staff

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Originally written by Timothy Adler on Small Business
Rishi Sunak could ask thousands of small businesses to cover national insurance and pension contributions of staff on furlough from August.
Earlier this month, announcing the Coronavirus Job Retention Scheme would be extended until the end of October, the chancellor said that businesses would have to share some of the cost with government.
>See also: Rishi Sunak extends job retention furlough scheme to October
According to Bloomberg, one idea under consideration is asking small businesses to share the pain by covering national insurance contributions and auto-enrollment pension contributions of furloughed staff.
Over a million businesses have furloughed staff through the CJRS, which covers up to 80 per cent of an employee’s wages capped at £2,500 per month.
The fear is that asking mothballed businesses to cover national insurance and pension contributions will only hasten the inevitable redundancies when people come out of furlough. The gloomy prognosis is that a million or so workers currently furloughed have already lost their jobs but are being kept on furlough ventilator support.
>See also: Government launches business Coronavirus Job Retention Scheme
The government has been paying 80 per cent of the wages of about eight million workers. CJRS has cost more than £11bn and

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Government looking at bringing in part-time furlough immediately

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Originally written by Timothy Adler on Small Business
The government is listening to retailers about being allowed to bring back furloughed staff on a part-time basis, according to one senior source.
Although independent retailers are being asked to reopen from June, the Coronavirus Job Retention Scheme will only allow part-time furlough from August.
Given a cratered economy and uncertain demand, retailers are asking why the government insists on this all-or-nothing approach.
Some shops are gingerly reopening towards the end of the working week but would have to pay staff taken off furlough fully time.
“Part-time furlough has been raised by retailers and a number of MPs. It’s something that we’re looking at and try to respond to,” said the source.
“By extending the furlough scheme in the first place, and then extending it a second time, it shows that we’re listening. We do listen and hope we’re being seen to be flexible and responsive.
“Businesses are burning though cash with no changed in fixed costs. We are never going to have had perfection implementing schemes at such speed and scale.”
Self-employed owner-directors
Meanwhile, the government is still thinking about how to open up the Self-Employed Income Support Scheme (SEISS) to self-employed owner directors.
The problem, said the source, is that

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