Tax news April 2020
COVID-19: Reclaims of statutory sick pay will be state aid
27 April: HMRC has confirmed that reclaims of employees' coronavirus-related statutory sick pay qualify as state aid under the EU commission's COVID-19 temporary framework which caps support.
Update 19 May: HMRC has confirmed the Euro conversion rate to be used is the rate for April 2020
The government announced on 13 March that employers with fewer than 250 staff would be able to reclaim statutory sick pay (SSP) for those who were off due to coronavirus symptoms, self-isolating or shielding.
Ahead of the coronavirus SSP rebate scheme's launch, HMRC has updated its guidance confirming that the scheme falls within the EU Commission's COVID-19 temporary framework for state aid.
Under the EU rules, which the UK remains subject to until 31 December as part of the transition agreement, the level of state aid support for organisations is limited.
Under the temporary framework for COVID-19 the threshold for support is generally €800,000, but it is lower for the agriculture sector (€100,000) and the aquaculture and fisheries sector (€120,000). This framework is separate and in addition to standard state aid limits, such as those that apply to de minimis state aid.
Alongside the SSP reclaim scheme, the hospitality & leisure grant fund has been confirmed as qualifying state aid under the temporary framework for COVID-19, but there is less clarity about some of the UK government's other support schemes. This means organisations, particularly in the agriculture and fisheries sectors, should pay close attention to the support they are receiving. Businesses should be notified if the support falls under this framework and is subject to the limits.
On 19 May HMRC confirmed the conversion rate that will apply when assessing whether a claim under the coronavirus SSP rebate scheme breaches the limits is the rate for April 2020.
Although HMRC's guidance on the coronavirus SSP rebate scheme does not make reference to this, recipients of aid under the temporary framework are required to make a declaration that they were not in difficulty prior to 31 December 2019.
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