COVID-19 Update - 9th April

10 Apr 2020
Sophie Kwiatkowski
A 5 minute read
by Sophie Kwiatkowski

Update 9th April 2020

Another week… we hope all our clients are making the most of the lovely weather where possible! Sunshine at least brings a little bit of cheer in these times of uncertainty.

Here at PFM we would like to take the opportunity to wish you all a wonderful, albeit slightly different bank holiday weekend and a Happy Easter!

This week the update is mainly focused on the furloughing of staff, as we have had a couple of developments this week.

Furloughing staff for practices

The main announcement is that the portal is expected to go live on 20th April 2020. This should give plenty of time for submissions to be made to help cover April’s wages.

If you cannot maintain your current workforce because your operations have been severely affected by coronavirus (COVID-19), you can furlough employees and apply for a grant that covers 80% of their usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.

This is a temporary scheme in place for 3 months starting from 1 March 2020, but it may be extended if necessary and employers can use this scheme anytime during this period. It is designed to help employers whose operations have been severely affected by coronavirus (COVID-19) to retain their employees and protect the UK economy. However, all employers are eligible to claim under the scheme and the government recognises different businesses will face different impacts from coronavirus.

As we have seen from the NHS last week, mixed practices can furlough staff in relation to their private income only. The NHS have suggested that if you have a rates letter used for 2020/21 rates that you use this percentage. Otherwise, your last set of accounts can be used as a split of NHS/Private income, so please contact us if you have any questions.

Key conditions:

• The grant will cover 80% of a staff member’s usual monthly wage costs, up to £2,500 a month.

• Staff have to be furloughed for at least three weeks at any one time. Staff cannot do work for the employer whilst they are furloughed.

• You must have created and started a PAYE payroll scheme on or before 28 February 2020 and any staff members that you wish to be furloughed must have been on the payroll at this time

• If you’re employee is on sick leave or self-isolating, they’ll be able to get Statutory Sick Pay. You cannot claim for employees while they’re getting Statutory Sick Pay, but they can be furloughed and claimed for once they are no longer receiving Statutory Sick Pay.

• The normal rules for maternity and other forms of parental leave and pay apply. You can claim through the scheme for enhanced (earnings related) contractual pay for employees who qualify for maternity/paternity pay.

• Claims should be started from the date that the employee finishes work and starts furlough, not when the decision is made, or when they have been written to confirming their furloughed status.

What to claim?

For full or part time employees on a salary, you can claim for 80% of the employee’s salary, as of 28 February 2020, before tax. For employees whose pay varies; if the employee has been employed for 12 months or more, you can claim the highest of either the:

• same month’s earning from the previous year

• an average of the monthly earnings for the 2019-2020 tax year

If the employee has been employed for less than 12 months, claim for 80% of their average monthly earnings since they started work.

You’ll still need to pay employer National Insurance and pension contributions on behalf of your furloughed employees, and you can claim for these too.

Self-employed update

The BDA posted this week that they are still pressing the Chancellor for help for associate dentists along with predominantly private practices that cannot rely on NHS funding.

Among the points raised were:

• Allow the 2019/20 tax returns of 2019 graduates and those new to self-employment to be considered for the Self-Employed Income Support Scheme (SEISS)

• Remove the £50,000 profit cap on eligibility for the SEISS

• Allow limited company directors to receive a grant of up to £2,500 of their monthly salary to bring them in-line with the employed and self-employed schemes

We are still waiting to see if anything will be done to help those of you with profits over £50,000 or that started self-employment during the 2019/20 tax year, but pressure is being put on the government to provide answers.