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Furlough and SEISS 2.0: Your questions answered

Keeping up with the latest government guidance remains a challenge, so Kate Upcraft and Rebecca Benneyworth were back this week to answer questions on the revised coronavirus business support schemes.

18th Jun 2020
Tax Writer
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AccountingWEB Live seminars with Rebecca Benneyworth and Kate Upcraft begin on 22 June 2020
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This week’s Coronavirus response Q&A webinar came hot on the heels of revised furlough guidance and further details on the SEISS extension, both of which were released by the government last Friday evening.

This was the last in the popular 12-week series of interactive sessions focusing on Covid-19 issues, but our regular business and technical panellists will continue to be available for regular consultations in AccountingWEB’s new Any Answers Live webinars.

During this week’s session, Kate Upcraft tackled the numerous items of complexity arising from the revised Coronavirus Job Retention Scheme (CJRS 2.0) while Rebecca Benneyworth shone a light on the upcoming Self-Employment Income Support Scheme (SEISS) extension.

CJRS 2.0: a complicated mess

Eight out of 10 participants summed up the state of CJRS 2.0 in a webinar poll as “a complicated mess”.

According to Upcraft a lot of advisers have been struggling to get their heads around the definition of “usual hours”. Glenn Martin’s tongue-in-cheek solution to the problem was to tell all clients they needed to be back at work by 30 June.

Upcraft alerted viewers to a few oddities with the new, flexible calculations. Following the new guidance, if the usual hours calculation results in a fraction, this is rounded up to the next whole number. However, national insurance and pension calculations round down the furlough pay to the nearest pound.

SEISS: check clients’ eligibility

On 12 June, the government released details of “version two” of the SEISS grant, with more information still to come.

Rebecca Benneyworth made the point that there still isn’t a huge amount of guidance from HMRC on the definition of “adversely affected”.

She advised practitioners to gently guide clients on their eligibility (or not) for version two of SEISS, and suggested clients claiming the second grant from July 14 keep contemporaneous records documenting why they thought they were adversely affected – something audience member Claire Bradley’s firm was already doing.

Advisers should also tell clients to get their version one SEISS claims in by 13 July, if they haven’t already done so, she added.

Audience questions answered

Perhaps unsurprisingly, given the complexity around CJRS and the lack of detail for the SEISS extension, many of the questions centred on the furlough scheme. Some of the questions included:

Q - How do we calculate usual hours for a director?

A - Benneyworth: No idea as directors don’t record their hours! My gut says to go by days, but I hope HMRC comes out with a bit more guidance for directors. It’s such a big gap, HMRC need to come in and fill that gap.

Upcraft: This is a very good point. I’m expecting the portal to be designed the same way as the calculation, so if you can’t key in hours you can’t make a claim.

The hours issue doesn’t come into this at all until you do flexi-furloughing. So if you’ve got people on full furlough, life is as normal.

Q -  Do holiday hours need to be deducted from available hours for furlough?

A - Upcraft: It says in the guidance when you’re working out someone’s usual hours you don’t discount for any periods of sick leave, family leave or holiday leave, so you pretend that they were at work. If for the reference period you’re looking at they weren’t there the whole time, that doesn’t come into play.

Q - Do we know if HMRC will be contacting taxpayers who might be eligible for version two SEISS as they did with version one?

A - Benneyworth: I would expect HMRC to contact people that they believe are eligible again. Note that if your business wasn’t affected in the first claim but is now, you can make your version two claim independent of whether you claimed for version one.

The eligibility test is exactly the same. The claims aren’t yet open, but you can sign up to be notified when it opens and the guidance changes, so for IT-literate clients that’s a good idea.

Q - Is it the case that for the job retention scheme the amount should be brought into the accounts on the accruals basis, rather than the SEISS, which is only reported in the 2020/21 tax return?

A - Benneyworth: Yes, I suppose you should accrue for the furlough scheme. Good question!

Rebecca Benneyworth and Kate Upcraft will both be appearing in our continuing season of AccountingWEB Live interactive webinars. If you have further questions about coronavirus business support guidance or any other issue, register now for our next Any Answers Live webinar at 9am on Tuesday 23 June. See you there!

Replies (2)

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By Swedish Chef
19th Jun 2020 10:10

Wasn't the SEISS covering March/Apr/May, with SEISS 2.0 covering June/July/Aug?

https://commonslibrary.parliament.uk/research-briefings/cbp-8879/

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Replying to Swedish Chef:
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By [email protected]
19th Jun 2020 14:24

It looks to me like the Treasury have conveniently wiped out June AND two weeks of July for SEISS part two. The new claim has to be based upon loss of earnings/ business AFTER July 14th 2020
“HMRC will work out a person’s eligibility for the second grant the same way as the first grant. If a person make a claim for the second grant they will have to confirm their business has been adversely affected on or after 14 July 2020“
Am I missing something here?

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