CJRS: In general
It’s been a busy week since HMRC opened its CJRS portal on Monday morning and we began making the first of our clients’ furlough claims.
Overall, the portal seems to be coping with the sheer volume of claims being made nationally. Official figures state that as of close of business on Monday [20th April], more than 140,000 companies, employing a total of around one million workers, had applied to the Government’s job furlough scheme
Despite the rather laborious 14-screen sequence that a claimant must go through and the 15-minute time-out limit feature, the system has been designed to process up to 450,000 applications an hour, thus helping to avoid any slow processing concerns.
Some of the issues that have emerged are due to design decisions that HMRC made to implement the claims system as quickly as it could. There have since been hints that once the system beds in, some of the restrictions and validation routines will be tweaked to improve user experience.
CJRS: Claim extension
The CJRS has been extended to 30 June 2020, giving the potential for the furlough of employees for a total period total of four months starting from 1 March 2020.
Interest Rates: Reductions
Following the Bank of England’s decisions to reduce the base rate in response to the pandemic, HMRC has announced that its late payment interest rate will decrease to 2.6% with effect from 7 April 2020.
The rate, which applies to late payments of the main taxes and duties administered by HMRC, tracks at 2.5% above the base rate.
For companies in the Corporation Tax quarterly payment regime, the change takes effect from 30 March.
The rate for underpayments of quarterly instalments is reduced to 1.25% from 23 March 2020.
The interest rate which HMRC will apply to overpayments of tax remains unchanged at 0.5%.
Future Fund: Convertible loan scheme
This new funding facility was announced on Monday. Due to launch in May 2020, it will initially remain open until the end of September and be delivered in partnership with the British Business Bank.
Although the scheme is badged as applying to high growth innovative companies, the information released so far does not include any detail on specific eligibility criteria related to innovation. This is, however, expected shortly and we will continue to bring you the latest news and updates.
As a guide:
- The ‘Future Fund’ scheme will offer unsecured bridge Government funding of up to 50% of the total bridge funding received by a company, where the remaining amount is provided by private third-party investors.
- It is open to companies with a UK economic presence that have raised at least £250,000 in the last five years.
- The bridge funding will automatically be converted into equity on the company’s next qualifying funding round.
- The minimum lending from Government is £125,000, up to a maximum of £5,000,000.
- The minimum interest rate from Government will be 8% and the loan will mature after a maximum of 36 months.
Finally, a word of warning:
HMRC has issued an update to warn taxpayers against falling foul of internet scams and phishing emails.
The update explains that you will never receive an email, text message or phone call from HMRC which:
- tells you about a tax rebate or penalty
- asks for your personal or payment information.
You can report anything suspicious to HMRC’s phishing team on phishing@hmrc.gov.uk
Full guidance from HMRC can be founded here: https://www.gov.uk/topic/dealing-with-hmrc/phishing-scams
For more information, please contact your Champion advisor.
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