Accounting for COVID 19: latest developments

Richard Starkey outlines the latest accounting news for business owners…

 As we head out of the weekend, there’s one priority on our minds here at Business Control – the government’s portal for the Coronavirus Job Retention Scheme, which opened on Monday. Put simply, this is the website where businesses need to register their furloughed workers.

 As mentioned in a previous blog, it is the employer’s responsibility to first pay their furloughed workers (at 80% of their basic pay before bonuses or overtime) and then claim the money back from the government. This portal is where you should make that claim – or rather, this is where your accountant should be claiming on your behalf. 

 Most accountants will handle this type of reporting for their clients under the ‘64-8’ authorisation form, and we're currently busy inputting the details of nearly 100 of our clients who are choosing to furlough workers. 

Different payment approaches

Interestingly, different employers are taking different approaches to the situation and it might be worth considering these options yourself. For example, some are paying their employees the flat 80% from the government; some are topping up that money to 100%; while others are paying staff the government’s 80% but keeping track of the remaining 20%, with a view to paying that difference back in stronger economic times. Not all businesses will be able to afford this, but as I say, it’s worth considering. 

Fast payment turnaround

Whether the new portal will be able to handle the deluge of claims that will be made remains to be seen (my feeling is that it won’t!), but one very encouraging detail to emerge is that the claims will be processed very quickly, with the money in the company’s bank accounts within six days. Plus, we did some further investigation and it seems that it’s possible to claim for furlough in advance, so we can claim for March and April furloughs at the same time (so we can pay April payrolls). This will be very welcome news for those struggling with cashflow at the moment.

The details you’ll need

Naturally, my team and I will be inputting all of our clients’ details into the new portal, but if you’re taking responsibility for this task yourself, you’ll need the following:

• Your ePAYE reference number, bank account number and sort code.
• The number of employees being furloughed
• The claim periods (start and end date)
• The amount being claimed (the minimum length of furlough is three weeks)
• Your contact name and telephone number

 As a final note on furloughing, the government released a notification this week thousands more employees will able to receive support through the Coronavirus Job Retention Scheme after the eligibility date was extended to 19 March 2020 (the previous date was 28 February). This is slightly disingenuous reporting I’m afraid, as to qualify, the employee must have been notified to HMRC through an RTI submission before 19 March... and in fact that date would have been nearer 28 February anyway!

The longer view

It’s been heartening to see so many of the businesses that I deal with not trying to claim more than they’re due and doing their bit to help the country by paying their VAT and taxes if they’ve got the money in their account. It’s also been good to see companies pivoting their services to take advantages of new markets and fresh opportunities. From the butchers who are refocussing as a home delivery service to the manufacturing company that’s retooling its entire production line. There’s plenty of innovation and ambition here in the South West and long may it continue. 

Stay safe.

 Don’t forget to check out the rest of our Accounting for COVID-19 blogs here, and please check back periodically to get the very latest insight and information from the Business Control team.

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