Tax on measures to tackle cash management

Businesses are facing unprecedented levels of operational disruption with new challenges emerging daily. One of the key challenges is cash management and liquidity but an important question is how we factor taxes into this. When considering the various measures introduced some key tax considerations have emerged.

Coronavirus job retention scheme

Although much of the commentary on the coronavirus job retention scheme (CJRS) has focused (understandably) on grants for employee salaries it should not be forgotten that employers are also eligible to be reimbursed for the employer’s National Insurance contributions and the minimum auto-enrolment employer pension contributions attributable to the pay covered by CJRS. Note however that CJRS does not cover apprenticeship levy contributions.

Grants under CJRS are separate from normal payroll processes in that employers are still required to deduct income tax and employee’s National Insurance under...