The Coronavirus pandemic presents the charity sector with huge challenges. Our experts have been analysing the government measures announced to support UK businesses and individuals. Here we summarise the support that is of relevance to charities and those who work in the charity sector.
Further updates on CJRS
Employers will be able to apply for the CJRS online from Wednesday 11 November for periods from 1 November. Claims for November will need to be submitted by 14 December.
What’s new in the support available:
- CJRS has been extended to 31 March for all parts of the UK. From 1 November, the UK Government will pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month. The UK government will review the policy in January.
- Employers and their employees do not need to have used the scheme before to claim for periods from 1 November.
- HMRC intend to publish details of employers who use the scheme for claim periods from December, and employees will be able to find out if their employer has claimed for them under the scheme.
- There are now monthly deadlines for claims. Claims for period on/after 1 November must be submitted within 14 calendar days after the month they relate to, unless this falls on a weekend in which case the deadline is the next weekday.
- The Job Retention Bonus will no longer be paid in February 2021 and an alternative retention incentive will be put in place at the appropriate time.
- The launch of the Job Support Scheme has also been postponed.
Further details can be found here.
What employers need to do now
Submit any claims for periods up to 31 October on or before 30 November. Claims for periods up to 31 October will not be accepted after 30 November. Claims are subject to eligibility and the rules in force at the time. Search ‘Coronavirus Job Retention Scheme’ on www.gov.uk for full eligibility criteria.
What employers need to do for claims for periods from 1 November
- Read the new guidance – go to www.gov.uk and search ‘Extension to the Coronavirus Job Retention Scheme’ – to check if they are eligible.
- Agree working hours with employees who are to be furloughed for November and agree any changes to their employment contract.
- Work out how much can be claimed for employees using HMRC’s CJRS calculator and examples on www.gov.uk.
- Submit any claims for periods from 1 November no later than 14 December.
Employers will need to keep the records that support the amount of CJRS grant they claim, in case HMRC need to check it.
Charity meetings in England
The government has introduced new rules from 5 November restricting meeting socially in England. However, you can still hold trustee or members’ meetings where these meetings are necessary for providing voluntary or charitable services.
You can get more detailed information on these rules in the guidance new national restrictions from 5 November.
Charity meetings in Wales
Different rules apply in Wales. From 9 November the rules restrict meeting socially. If you can, you should hold trustee or member meetings online or by telephone. However, if you cannot do this, you can hold trustee or members’ meetings in person if this is necessary to provide voluntary or charitable services.
You can find more guidance on the rules in Wales from 9 November on the Welsh government website.
Furlough scheme extended
On 31 October, the Prime Minister announced that the Coronavirus Job Retention Scheme (CJRS), also known as the Furlough scheme, will remain open until December, with employees receiving 80% of their current salary for hours not worked, up to a maximum of £2,500 per month. Under the extended scheme, the cost for employers of retaining workers is reduced compared to the current scheme, which ceased at the end of October and which only provided government support of 60% of employee salaries. The extended furlough scheme, which reverts to the 80% level, is more generous for employers than it was in October.
On 5 November is was announced that the CJRS will now run until the end of March 2021 with employees receiving 80% of their current salary for hours not worked, up to a maximum of £2,500 per month.
Support for the self-employed through the Self-Employment Income Support Scheme (SEISS) is also being increased, with the third grant covering November to January calculated at 80% of average trading profits, up to a maximum of £7,500.
Job Retention Bonus Scrapped
The Chancellor has also announced that the Job Retention Bonus, a £1,000 one-off payment per employee payable to employers that had retained previously furloughed staff until the end of January 2021, is to be scrapped for now and replaced with a new “retention incentive” that would be deployed at an “appropriate time”.
Job Retention Bonus
As announced at the Summer Economic Statement last month, the government will make a one-off Job Retention Bonus (JRB) to employers of £1,000 per employee to encourage them to keep on their furloughed employees in meaningful employment until at least 31 January 2021. Some more information has now been published on the operation of the bonus. Eligible employees must earn at least £520 a month on average between 1 November 2020 and 31 January 2021. Employers will be able to claim the JRB after they have filed PAYE for January 2021 and payments will be made to employers from February 2021. In addition, the JRB will be taxable, so businesses within the charge to tax must include it as income when calculating taxable profits for Corporation Tax or Self-Assessment. Full guidance on the scheme will be issued at the end of September. Read more here.
Property and landlords update: Cash flow considerations
Due to Coronavirus, landlords may be facing significant uncertainty and reductions in their income, with resultant impacts on their cash flow position. This briefing looks at some of the options and considerations available to landlords to assist with cash flow in the current climate. Many of the issues that affect commercial landlords will also affect charities that are landlords; although most charities will of course continue to be exempt from income or corporation tax on their rental income. Read more.
Coronavirus Community Support Fund (CCSF) closing date for applications
The closing date for applications for Government funding from the Coronavirus Community Support Fund (CCSF), is 12 noon on 17 August 2020. The fund will close on this date and distribution of the funds should be completed by the end of October 2020. The CCSF is a £200m fund that was launched as part of the Government’s £750m financial support package for charities and social enterprises announced on April 8. More details can be found here.
Key dates for the Coronavirus Job Retention Scheme (CJRS)
- CJRS claims for periods ending on or before 30 June 2020 must be submitted to HMRC by 31 July 2020. This is the last date to make those claims. Employers need to have made a claim at any point on or before 31 July to be able to make a claim for future months.
- From 1 August 2020 the scheme will no longer fund employers’ National Insurance (NI) and pensions contributions for furloughed employees. Employers will have to make these payments from their own resources.
- From 1 September 2020 employers will have to start contributing to the wages of furloughed employees. Grants will be for 70% of usual wages in September and 60% in October, but furloughed employees will continue to be entitled to receive at least 80% of their usual wages. Employers will have to make up the difference from their own resources.
Job Retention Bonus
On 8 July the Chancellor announced the introduction of the Job Retention Bonus.
This is a one-off payment of £1,000 to employers that have used the Coronavirus Job Retention Scheme (CJRS) for each furloughed employee who remains continuously employed until 31 January 2021. The bonus will provide additional support to retain employees.
To be eligible, employees will need to:
- Earn at least £520 per month (above the Lower Earnings Limit) on average for November, December and January.
- Have been furloughed at any point and legitimately claimed for under the CJRS.
- Have been continuously employed up until at least 31 January 2021.
Employers will be able to claim the bonus from February 2021 once accurate RTI data to 31 January has been received by HMRC. More information about this scheme will be available by 31 July and full guidance will be published in the Autumn.
Arts, culture and heritage industries to receive £1.57 billion rescue package
The government announced on 5 July a £1.57 billion rescue package to help the arts, culture and heritage industries to weather the impact of Coronavirus.
Thousands of organizations across a range of sectors including the performing arts and theatres, heritage, historic palaces, museums, galleries, live music and independent cinema will be able to access emergency grants and loans.
The package announced includes funding for national cultural institutions in England and investment in cultural and heritage sites to restart construction work paused as a result of the pandemic. The package includes:
- £1.15 billion support pot for cultural organizations in England delivered through a mix of grants and loans. This will be made up of £270 million of repayable finance and £880 million grants.
- £100 million of targeted support for the national cultural institutions in England and the English Heritage Trust.
- £120 million capital investment to restart construction on cultural infrastructure and for heritage construction projects in England which was paused due to the Coronavirus pandemic.
- The new funding will also mean an extra £188 million for the devolved administrations in Northern Ireland (£33 million), Scotland (£97 million) and Wales (£59 million).
Decisions on awards will be made working alongside expert independent figures from the sector including the Arts Council England, Historic England, National Lottery Heritage Fund and the British Film Institute.
Repayable finance will be issued on generous terms tailored for cultural institutions to ensure they are affordable.
Further details will be set out when the scheme opens for applications in the coming weeks.
Employers can start to flexibly furlough eligible employees from 1 July onwards
From 1 July, employers can claim a more flexible grant for any employee they have previously received a CJRS grant for, and who now returns to work on reduced hours. Employers can also continue to claim for employees who stay fully furloughed.
HMRC’s guidance on the CJRS, which was updated on 26 June, can be found here.
Employers will need to:
- Claim for periods ending on or before 30 June, by 31 July – this is the last date that those claims can be made.
- Agree the hours and shift patterns that employees are to work from 1 July.
- Pay employees’ wages for the time they’re in work and apply for a job retention scheme grant to cover the remainder of their usual hours for which they are still furloughed.
- Claim for further furlough periods as needed – the first time that a claim can be made for days in July will be 1 July.
Charities funding gap
UK charities are facing a £10.1 billion funding gap over the next six months as a result of COVID-19, with incomes expected to drop by £6.7 billion at the same time as demand for their support rises by the equivalent of £3.4 billion, according to new analysis from charity Pro Bono Economics (PBE) released on 9 June.
Coronavirus Job Retention Scheme Update
On 29 May, Chancellor Rishi Sunak revealed more details on the previously announced changes to the Coronavirus Job Retention Scheme. You can read our full update here.
Fraud Advisory Panel webinar on COVID19 and charity fraud
The Fraud Advisory Panel and the Charity Commission for England and Wales have produced a free webinar on COVID-19 and charity fraud. The webinar highlights some of the common ways that charities may be affected by fraud during the pandemic and provides some simple prevention tips.
Job retention scheme extended
The Coronation Scheme will continue until the end of October. The scheme will continue in its current form until the end of July and new flexibility will be introduced from August. More specific details and information around the changes will be made available by the end of this month. From August furloughed workers will be able to return to work part-time and employers will be asked to pay a percentage towards the salaries of their furloughed staff. The employer payments will substitute part of the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month. In addition, the government will explore ways through which furloughed workers who wish to do additional training or learn new skills can be supported.
Amendments sought to eligibility criteria for Small Business Grant Fund
The Charity Tax Group has proposed that a small change is made to the rules of the Small Business Grant Fund (SBGF) to allow small charities to benefit from the £10,000 grant available under the SBGF. Currently, the SBGF is only available to businesses that are eligible for either Small Business Rates Relief (SBRR) or Rural Rates Relief. Charities in receipt of Charities Rates Relief are not eligible for SBRR, which means that they are ineligible for grants from the SBGF. The CTG has asked Government to amend the SBFG eligibility criteria.
HMRC new guidance on Gift Aid on ticket refunds for cancelled events
To help reduce administrative burdens on charities, if a charity event is cancelled due to COVID-19, HMRC will accept that the charity no longer has to physically refund the ticket price for the individual to re-donate should the individual wish the charity to retain the refund as a donation.
The charity must contact the individual who previously purchased the ticket of the cancelled event and explain that the individual is entitled to a refund but may wish to donate the cost of the ticket to the charity, making clear that the individual does not have to donate the refund but, if they choose to donate it, it’s non-refundable and that they must pay sufficient tax to cover the tax that the charity will claim on the donation. The charity must ensure that there is a Gift Aid declaration in place for the individual and keep an audit trail, including evidence of the agreement from an individual agreeing to the donation of the cost of the ticket.
The charity no longer has to physically refund the ticket price for the individual to re-donate. Further details can be found here.
£50 million available from Heritage Emergency Fund
The National Lottery Heritage Fund has made £50 million available for a Heritage Emergency Fund to support the UK heritage sector as an immediate response to the Coronavirus crisis. The fund will be available for organisations in the sector to access over the next few months as short-term funding to stabilise operations and manage unforeseen risks. Grants of between £3,000-£50,000 will be available. Information can be found here.
Coronavirus Job Retention Scheme online portal
The Coronavirus Job Retention Scheme online portal went live on Monday 20 April. Please follow the link here for our comments.
Charities currently preparing their March year end VAT returns should be aware of the VAT deferral mentioned in our VAT update.
If you want to take account of the deferral then you need to submit your VAT return in the normal way by the due date. If your return payment is taken by direct debit then you will need to contact your bank and cancel the direct debit instruction. The deferred VAT payment must be made by 31 March 2021.
30 June VAT returns
Payment for your next VAT return to 30 June 2020 which for many organisations will include their year end annual adjustment will need to be made under the normal payment timetable ie by 7th August 2020.
VAT errors and corrections
If you find errors or corrections which must be notified to HMRC, these can now be made by email by completing VAT form 652 and emailing this to [email protected]. Postal notifications are no longer being accepted.
Temporary relief from import VAT for medical supplies
HMRC have introduced temporary measures to relieve from import VAT medicines and equipment for certain non-state bodies. Further information on the goods covered can be found here.
Scottish Government sets up the Third Sector Resilience Fund (TSRF) with emergency funding for those experiencing financial difficulties as a direct result of Covid 19
The Fund aims to support charities, community groups, social enterprises and voluntary organisations working in Scotland which find themselves in financial difficulties as a direct result of the Coronavirus pandemic. The Fund provides grants of up to £100,000, in addition to 0% interest loans starting at £50,000. To be eligible, organisations must be:
- a charity, social enterprise or voluntary organisation based in Scotland and/or primarily delivering services/activities in Scottish communities;
- already delivering those products or services prior to March 2020; and
- needing funding to stabilise cashflows directly as a result of the impact of COVID-19, as opposed to pre-existing financial difficulties
An eligibility checker to assess an organisations suitability for the fund is included on the Scottish Council for Voluntary Organisation (SCVO) website. Based on the answers provided, interested applicants will be directed to the most suitable application form.
National Emergencies Trust (NET) UK Coronavirus Appeal Foundation Scotland
The NET funds for Scottish organisations will be distributed by Foundation Scotland, and most immediately will provide emergency funding for local charities and community organisations who are supporting Scotland’s most affected and vulnerable people. Grants of between £1,000 and £5,000 are available.
In the longer term, the fund will aim to fund a wider group of charities and organisations whose operations and finances have been affected so that they can recover, re-establish or re-design their activities once the outbreak eases in response to community needs at that point. Online applications can be made on the Foundation Scotland website.
Community Foundation Wales Coronavirus Resilience Fund
Community Foundation Wales will distribute NET funds in Wales. In addition, the Foundation has set up the Wales Coronavirus Appeal to fund charities, community groups and not for profit organisations working in Wales, who provide activities for vulnerable groups.
Community Foundation for Northern Ireland Coronavirus Community Fund
Community Foundation for Northern Ireland will distribute funds NET funds in Northern Ireland and has up a Coronavirus Community Fund to provide funding to community organisations to help them deliver support around emerging issues relating to the virus.
Community Foundations throughout England
English regional foundations will distribute NET funds in their regions. A full list can be found at www.ukcommunityfoundations.org
Other grant funding available to Scottish charities
There are other grant funders who are offering support to charities within specific sectors, particularly those who are undertaking work directly related to the coronavirus pandemic. The SCVO have a central resource of funds available to Scottish charities during this time, which is available on their website: https://scvo.org.uk/support/covid-19
SCVO COVID information Hub
SCVO has a COVID information hub with information on how to support and protect staff, funding available to support with the crisis, governance issues and business support, service provision, fundraising issues and much else together with FAQs.
£750 million government support for frontline charities
The Chancellor has announced that £750 million will be made available to frontline charities across the UK – including hospices and those supporting domestic abuse victims. The funding will include:
- As part of a UK-wide package of support, £360 million will be directly allocated by government departments to charities providing key services and supporting vulnerable people during the crisis. These will include:
- Hospices to help increase capacity and give stability to the sector;
- St Johns Ambulance to support the NHS;
- Victims charities, including domestic abuse, to help with potential increase in demand for charities providing these services;
- Vulnerable children charities, so they can continue delivering services on behalf of local authorities; and
- Citizens Advice to increase the number of staff providing advice during this difficult time.
- £370 million will be provided to small and medium-sized charities, including through a grant to the National Lottery Community Fund for those in England, to support organisations in local communities, including those delivering food, essential medicines and providing financial advice.
- The government will also match donations to the National Emergencies Trust as part of the BBC’s Big Night In fundraiser later this month – pledging a minimum of £20 million.
Departments will now work at pace to identify priority recipients, with the aim for charities to receive money in the coming weeks. The application system for the £370 million to be distributed by the National Lottery Community Fund is expected to be operational within a similar period of time.
Letter to DCMS Select Committee from the Secretary of State
In a letter to the Digital, Culture, Media and Sport Select Committee, the Secretary of State for Digital, Culture, Media and Sport, confirmed that:
- Charities can access the Coronavirus Job Retention Scheme – the Chancellor explicitly said this is available to charities.
- Charities with fewer than 250 employees can also get support for paying sick pay to employees.
- Charities and social enterprises earning more than 50% of their income from trading are eligible for loans supported by the Coronavirus Business Interruption Loan Scheme.
- Charities with retail arms, such as charity shops, may also be eligible for the Retail and Hospitality Grant Scheme, if their premises has a rateable value of up to £51,000 – local authorities will write to eligible charities.
NCVO has made its member-only resources free to everyone because of the current situation. Its guidance on Coronavirus covers protecting staff, volunteers and beneficiaries; contingency planning and financial implications; help from other charities and issues around involving volunteers.
Further HMRC guidance on job retention scheme
On 6 April HMRC refreshed its guidance on the job retention scheme for both employers and employees in line with some of the main queries HMRC has received from stakeholders. There is more detailed information on scheme eligibility, further information on how to calculate a claim and clarification of what constitutes wages.
Charity Tax Group letter to the Chancellor
On 3 April the Charity Tax Group wrote to HMRC on the many financial and tax issues facing charities as a result of COVID-19, including the specific issues affecting charities arising from the measures that the government is providing to support employers and businesses during the crisis. The letter covers issues arising from charities’ COVID-19 response activities, the cashflow issues affecting charities and the CFG’s suggestions for possible solutions and practical administrative issues for charities including tax reporting requirements and deadlines (which includes practical issues affecting the retail gift aid and the Gift Aid small donations scheme). Read more here.
HMRC has published guidance on who can use the Coronavirus (COVID-19) Statutory Sick Pay Rebate Scheme to reclaim employee coronavirus-related Statutory Sick Pay (SSP). It also includes information on records that must be kept for making such a claim.
The Coronavirus Statutory Sick Pay Rebate Scheme will repay employers the current rate of SSP that they pay to current or former employees for periods of sickness starting on or after 13 March 2020.
Employers that pay more than the current rate of SSP can only claim the current rate amount as a rebate.
The repayment will cover up to two weeks starting from the first day of sickness, if an employee is unable to work because they either:
- Have Coronavirus;
- Cannot work because they are self-isolating at home.
Employees do not have to provide a doctors fit note for a claim to be made.
The scheme can be used by employers if they:
- Are claiming for an employee who’s eligible for sick pay due to Coronavirus.
- Had a PAYE payroll scheme that was created and started on or before 28 February 2020.
- Had fewer than 250 employees on 28 February 2020.
Arts Council makes available emergency funding of £160 million
The Arts Council is making available £160 million of emergency funding to provide financial support to individuals and organisations in the cultural sectors during the COVID-19 crisis. The funding streams will open to applications shortly. £90 million will be made available to National Portfolio Organisations; £50 million to other organisations that are not in receipt of regular funding from the Arts Council and £20 million to support artists, creative practitioners and freelancers. More information can be found here.
ICAEW practical information for charities
The ICAEW has a webpage that gathers ICAEW insights and externally-produced resources providing practical information on managing charity finances and delivering services safely. Further information can be found here.
Charities SORP and COVID-19
The SORP-making body has published guidance for trustees and preparers of charity accounts looking at the potential impact of the control measures to contain COVID-19 on financial reporting by charities. The guidance considers the implications for the trustees’ annual report, going concern and the alternative basis to going concern when preparing accounts under the SORP.
All National Lottery Community Fund (NLCF) funding decisions in the next six months will be devoted to responding to the Covid-19 crisis.
Dawn Austwick, Chief Executive of the NLCF, has written: “all the funding decisions we make for the next six months (up to £300 million of National Lottery funding) will be devoted to addressing the current crisis. In addition, we will accelerate the cash part of this funding as much as we can, so that we can get money to where it needs to be. This is not new money, but it will be faster money and we know that we must act quickly and with confidence”. More information on the NLCF response can be found here.
The Charity Finance Group launches #EveryDayCounts public campaign
The CFG, has launched the #EveryDayCounts public campaign to ask its members and the wider charity sector to take action by writing to their MP and joining the effort on social media and other media to highlight how the Coronavirus crisis is affecting charities’ ability to deliver their services to their beneficiaries.
Charity Commission COVID-19 guidance for the charity sector
The Charity Commission has published guidance to help with running a charity during the Coronavirus (COVID-19) outbreak. Details can be found here.
Regulators urge safe giving
The Charity Commission and Fundraising Regulator have urged people to ‘give safely’ in response to the current crisis by giving to a registered, regulated charity, so that they can have assurance that their funds will be accounted for in line with the charity law framework. Further information can be found here.
OSCR guidance on charities and the coronavirus
The Scottish Charity Regulator has a webpage on charities and Coronavirus that includes FAQs covering items such as cancelling AGMs and events, changing charity purposes to use charity resources to help with the COVID-19 pandemic, the use of reserves to help charities through COVID-19, and making a notifiable event to OSCR where the current situation has a negative impact on a charity. Read the guidance here.
Filing charity annual returns
The Charity Commission has announced that any charity that needs an extension to their annual return deadline can contact the Charity Commission to ask for one. Details can be found here.
Many measures, whilst not aimed specifically at charities, may support charities as employers, charities that run businesses through trading subsidiaries and charities that have VAT payments. There are also measures to help the self-employed.