NAVIGATING CORONAVIRUS IN THE UK Webinar 2 June 2020 11:30 – 12:45 (BST) / 16:00 – 17:15 (IST)
AGENDA • UK India relationships and the support available to companies • Latest updates on business reliefs including the furlough scheme • Planning for your employees to return to work • Ensuring health and safety in the work place • Redundancies and changing the terms and conditions of employment • Financing options from the UK government • Q&A 2
YOUR SPEAKERS Vijay Tanna, Tim Stovold, Tax and Julie Chappell, Anjali Raval, India Group Chirag Rao India Group Partner, India Group Partner, Managing Director, & Employment Associate, Head of India Group, Moore Kingston Smith Moore Kingston Smith London & Partners Howard Kennedy Howard Kennedy Hosted by Bharat Rampal, Vice President BD, Moore Kingston Smith 3
Julie Chappell, Managing Director, London & Partners
Indian companies excelling in London 54% 4 842 Indian companies Indian companies choose set up in London companies in London as this financial year UK their HQ 110,793 £41.2bn employees total turnover
Support available from London and Partners London Growth Hub Pay it Forward London Alliance Online resource that brings together A crowdfunding platform on A city-wide alliance to kick-start the capital’s vast business support London.gov.uk consumer confidence. offer into a single hub.
PEOPLE Tim Stovold, Tax and India Group Partner, Moore Kingston Smith HELPING YOU THRIVE IN A CHANGING WORLD 7
CORONAVIRUS JOB RETENTION SCHEME The Scheme • To help employers whose operations have been severely affected by coronavirus (COVID-19) to retain their employees and protect the UK economy • The scheme is due to be in place from 1 March 2020 to 30 June in its current form and changes from 1 July to 31 October when it will end • 1m employers have applied for grants for 8,400,000+ employees with £15bn+ claimed (as of 24 May 2020) HELPING YOU THRIVE IN A CHANGING WORLD 8
CORONAVIRUS JOB RETENTION SCHEME The Scheme until 30 June – a reminder… • Employers can claim a grant equal to the lower of: • 80% of the monthly REFERENCE SALARY ; or • £2,500/month Any amount received must be paid to the employee in full through the payroll along with any amounts you choose to top up • PLUS – the associated employer’s NI (if being paid – watch out for 52 week NI exemption for secondees from India) • PLUS – the associated employer’s pension contribution (if being paid – secondees will not normally have a pension contribution on the basis that they are not normally employed in the UK) HELPING YOU THRIVE IN A CHANGING WORLD 9
CORONAVIRUS JOB RETENTION SCHEME Changes to the scheme Liability for employer’s NI Payment due from Month Furlough grant employer and pension on grant Max of £2,500 or 80% of Up to July 2020 None HMRC earnings Max of £2,500 or 80% of August None Employer earnings Max of £2,187.50 or 70% of Max of £312.50 or 10% of September Employer earnings earnings Max of £1,875 or 60% of Max of £625 or 20% of October Employer earnings earnings November The Scheme will end on 31 October 2020 so no further furlough grants can be claimed HELPING YOU THRIVE IN A CHANGING WORLD 10
CORONAVIRUS JOB RETENTION SCHEME Phased increase to cost to the employer Cost covered by: Cost covered by: HMRC Employer HMRC Employer Up to 31 July 2020 Salary payment 2,500.00 0.00 September 2020 Salary (70%/10%) 2,187.50 312.50 Er's NI 243.94 0.00 Er's NI 0.00 243.94 Pension 59.40 0.00 Pension 0.00 59.40 2,803.34 0.00 2,187.50 615.84 78.0% 22.0% 100.0% 0.0% August 2020 Salary payment 2,500.00 0.00 October 2020 Salary (60%/20%) 1,875.00 625.00 Er's NI 0.00 243.94 Er's NI 0.00 243.94 Pension 0.00 59.40 Pension 0.00 59.40 2,500.00 303.34 1,875.00 928.34 89.2% 10.8% 66.9% 33.1% HELPING YOU THRIVE IN A CHANGING WORLD 11
CORONAVIRUS JOB RETENTION SCHEME Changes to process of making claims • From 1 July 2020: • claim periods will no longer be able to overlap months. Claims can either be for a part month or whole month but not straddle two consecutive months; and • The number of employees an employer can claim for in any claim period cannot exceed the maximum number they have claimed for under any previous claim under the current CJRS. HELPING YOU THRIVE IN A CHANGING WORLD 12
CORONAVIRUS JOB RETENSION SCHEME CJRS to be closed to new entrants from 1 July 2020 • The scheme will close to new entrants from 30 June. • From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June • Final date by which an employer can furlough an employee for the first time will be the 10 June • Employers will have until 31st July to make any claims in respect of the period to 30 June. HELPING YOU THRIVE IN A CHANGING WORLD 13
CORONAVIRUS JOB RETENTION SCHEME The Scheme until 30 June – A reminder… • While on furlough, they: • Provide no services to their employer whatsoever • Generate no income for their employer directly or indirectly • Can carry out voluntary work or training If a client project has been cancelled and your secondees cannot return to India due to flights being unavailable, this is good grounds to furlough these employees Expect these conditions to be checked in future PAYE Compliance visits from HM Revenue & Customs • Minimum period of furlough to entitle employer to grant is 3 consecutive weeks per employee – claims for less than this period will be rejected HELPING YOU THRIVE IN A CHANGING WORLD 14
CORONAVIRUS JOB RETENTION SCHEME Flexible furloughing from 1 July 2020 (1) • From 1 July, employers can bring back to work employees that have previously been furloughed for any amount of time while still being able to claim CJRS grant for their normal hours not worked • Employers can claim the grant for the hours their employees are not working calculated by reference to their usual hours worked in a claim period. • Minimum claim period reduces from 3 weeks to 1 week when employee is flexi-furloughing HELPING YOU THRIVE IN A CHANGING WORLD 15
CORONAVIRUS JOB RETENTION SCHEME Flexible furloughing from 1 July 2020 (2) • Any changes to terms of furlough must be agreed with the employee in writing. • Further guidance on flexible furloughing and how employers should calculate claims will be published on 12 June. • An example… HELPING YOU THRIVE IN A CHANGING WORLD 16
CORONAVIRUS JOB RETENTION SCHEME Flexible furloughing from 1 July 2020 – an example • Employee’s normal salary is £42,000 per annum (so £3,500/month) • Employee comes back to work for 3 days per week • Employer decides to pay full salary for entire week rather than reduce salary for 2 days not worked • In August: • Employer pays £3,500 + Er’s NI + Er’s Pension • Employer claims 2/5ths x (Lower of 80% of Feb 2020 salary or £2,500) = £1,000 HELPING YOU THRIVE IN A CHANGING WORLD 17
CORONAVIRUS JOB RETENTION SCHEME Personal liability of directors for furlough claims and penalties (1) • Draft legislation issued on 29 May 2020 • If HMRC later discover that grants paid were not due – for example: • Employees carried out services for their employer • Errors were made in the claim • Grants were paid to employer but not used to pay salaries • Fraudulent claims then HMRC will raise an assessment for Income Tax equal to the amount of grant to be clawed back HELPING YOU THRIVE IN A CHANGING WORLD 18
CORONAVIRUS JOB RETENTION SCHEME Personal liability of directors for furlough claims and penalties (2) If the following conditions are satisfied: • The company is in liquidation/administration or there is a serious possibility of this happening; • The director “knew” at the time that HMRC try to claw back the grant that it should have been repaid; and • There is a serious possibility that the company will not be able to pay back HMRC; then, the director becomes joint and severally liable with the company for the grant being clawed back. HELPING YOU THRIVE IN A CHANGING WORLD 19
CORONAVIRUS JOB RETENTION SCHEME Penalties • If a director of the company knew that a grant should be repaid but does not notify HMRC of this then this behaviour is deemed to be a “deliberate and concealed” act; • Penalties for “deliberate and concealed” acts are a maximum of 100% of the amount due HELPING YOU THRIVE IN A CHANGING WORLD 20
No.1 London Bridge www.howardkennedy.com London SE1 9BG
Are you ready for your staff to return to work? 2 June 2020
Your speaker today Anjali Raval India Group and Associate, Employment Get in touch +44 20 3755 5396 Anjali.Raval@howardkennedy.com
What I will be covering • Ensuring health and safety in the workplace • Planning for your employees to return to work • Redundancies and changing terms and conditions
Current state of play • Furlough scheme extended to 31/10/20 – from 01/07/20 possible part-time work – but employers to share cost • If you can work from home: do • If you can’t: encouraged to return
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