Corona Pandemic: Immediate Taxation, Legal Measures and Financial Aid in the UK, Ireland and Uruguay

There is a small light at the end of the tunnel. Worldwide we have seen a slight slowdown in the pandemic, with some European countries announcing the first measures to ease the lockdown. However, the impacts are still affecting businesses and individuals. The UK and Uruguay have released further measures on labour support and taxation, while Ireland is releasing suggestions for implementing “returning to work”. Our professionals summarise for you.

UK

The UK government has announced a Coronavirus Job Retention Scheme (CJRS) to support the national workforce. The following is a summary of the details of the scheme with advice illustrated by two case studies from Ecovis Moore Barlow:

The Coronavirus Job Retention Scheme (CJRS)
Many businesses have seen their income reduced significantly in the wake of the global COVID-19 pandemic and, in order to prevent redundancies, the UK government has set up the CJRS. The scheme provides a grant to employers to pay 80% of employees’ wages, up to a cap of GBP 2,500, on condition that the employee does no work for the employer during the time they are furloughed (i.e. on temporary leave). As the CJRS is a new scheme and the government has frequently updated and amended its guidance in the month following the scheme’s announcement, many of our clients have required assistance with its implementation. The timeframe for much of this advice was very tight, as businesses had seen their incomes dry up overnight following the announcement of social distancing measures.

Advice given to a golf club
One of our clients is a golf club with leisure facilities, with whom we have worked on the operation of the CJRS. This included how to select employees for furlough in a non-discriminatory way, as well as practical assistance with the drafting of letters to employees. As the employment contract had a clause allowing the employer to reduce employees’ hours or to provide no work, the employer was able to implement the scheme quickly without being required to secure employees’ agreement to a contract amendment.

Advice given to individuals who employ carers
In a very different situation, we have several clients with disabilities who employ carers. They receive public funding to pay for the care and government guidance states that it expects those receiving public funding to pay staff to continue to use that funding to do so. The CJRS should only be used in a small number of exceptional situations.

The issue these clients were having was that a number of the carers had been advised to shield due to pre-existing health conditions and were therefore unable to work. As a result, the clients were having to pay other carers to work additional hours to cover those who were shielding, and wage costs had increased. We advised these clients that this was likely to be a situation in which they were able to furlough those carers who were shielding and use the public funding to pay the wages of the carers working additional hours.

Ecovis Moore Barlow remains at clients’ disposal to provide advice and support during the crisis.

Ireland

Planning for the return to work
The Taoiseach recently announced that the government is currently formulating a plan for slowly reopening society following the current lockdown. It is therefore advisable for all businesses to have their own re-entry strategy in mind to ensure staff safety. They should also bear in mind that restrictions may be reimplemented over the course of a number of months.

An automatic return to normal life is not to be expected and it is currently unclear what the government will decide to implement. However, there are some steps that can be taken ahead of time. Ecovis Ireland provides some advice for safe practice when your business is permitted to reopen:

• There is still some time before companies begin to open. This is time which can be utilised to assess the specific risks inherent to your specific work activity. A risk assessment will inform your reopening process. As COVID-19 is a highly contagious infection, protection is essential for all staff.
• Now is a good time to start sourcing supplies to safeguard your employees on their return. From hand sanitiser to hand soap and sanitising wipes, there are many ways to show your staff members that their health is a priority. Many suppliers are now offering COVID-19 specific hand sanitiser displays.
• PPE, such as gloves and face masks where available, may become part of the norm.
  Ensure that all staff are informed of social distancing measures. The HSE have a number of printable signs available online. As we are all aware, COVID-19 is spread through droplets and social distancing is the best armour available. It is therefore vital that you ensure that your business can be compliant in this way before reopening.
• In the event that physical distancing isn’t feasible on a daily basis, shift patterns or the continuation of work from home might be possible.
• It is, of course, hoped that all staff will be compliant. But in the event of non-compliance, there should be a disciplinary procedure in place.
• Checking employees’ temperatures at the start of the day may become a fixture of your business, as it has elsewhere.

Support for businesses impacted by COVID-19
Ecovis Ireland has been keeping you updated on the support available to you, your business and your employees during the current crisis. We have seen banks offering flexibility to their customers, the Revenue Commissioners offering support that was unimaginable just a few weeks ago and other grants and voucher schemes available from your Local Enterprise Board and Enterprise Ireland. However, it is still a very challenging and evolving situation. A very good summary of the most up to date support available can be found at the Citizen’s Information Board, which covers such topics as:

• The new COVID-19 Wage Subsidy Scheme
• Cash flow support for businesses
• Other general support for businesses
• Planning exemptions for restaurants and cafés
• Support for childcare providers
• Social welfare support for your employees in the case of temporary lay offs

Ecovis DCA is available to offer advice and guidance on any business or financial matters.

Uruguay

The strong measures of social distancing imposed by the government have had a positive effect on the impact of COVID-19 in Uruguay. By 27 April 2020, the number of coronavirus cases had risen to 606, with a total of 15 deaths, from a population of 3 million. During the past few weeks, the government has announced a series of measures to bring relief to both businesses and the public.

The measures are:

• Extension of tax due dates and flexible payment: Businesses with fiscal year ending 31 December 2019, who were due to submit the annual audited tax statement to fiscal authorities in April 2020, will be granted an extension of the due date until the end of May 2020. Also, tax payments can be made in up to two monthly, consecutive and equal payments, depending on gross income.
• Coronavirus Fund: The government has created a coronavirus fund to ensure the necessary economic support to finance the measures taken to alleviate the impact of the virus on the economy. The fund is made up of utilities from the State Bank, loans from multi-lateral lending institutions, contributions from parliament, as well as salary deductions from all state employees with a monthly income of more than UYU (Uruguayan peso) 80,000 (approx. USD 1,900).
• Benefits for state and private employees over the age of 65: All state and private employees older than 65 will be included in sickness benefits. This means that those people will be able to remain in confinement and still receive their salary. This measure is in force for a period of 30 days.
• Compulsory facemasks in public transport, shops and financial institutions: The government has stated that it is compulsory for both customers and employees to wear facemasks on public transport, at supermarkets and in banks or other financial institutions. Also, the government is encouraging people to use facemasks at all times when leaving their homes.
• Opening up the economy: Since the first stages of the pandemic outbreak in Uruguay, the government has declared the closure of schools, universities and all gatherings of more than 5 people. In the past few days, the government has re-opened some rural schools in areas where there have been no COVID-19 infections. Also, a protocol has been developed for restaurants and bars so they can welcome customers back to their facilities.

Ecovis Uruguay is monitoring all the immediate changes in taxation and labour law in order to help clients to respond quickly and compliantly.