Posted: 19 / 05 / 2020
The Coronavirus pandemic has provided businesses worldwide with challenges they’ve never faced before, resulting in governments across the globe providing unprecedented care packages to help those businesses survive.
In the third instalment of Toronto Wolfpack’s Running with the Pack webinar series, Audit Partner at Sedulo, Dan Wilson, joined Senior Tax Manager at Deloitte Toronto, Sean Murphy to discuss the various support measures available to businesses that have been introduced by both the Canadian and UK governments, as well as discussing how they compare, what has worked well in both countries and what hasn’t worked well in practice.
The full recording of the webinar is available to watch below on YouTube, or you can read the summary below…
The support packages offered by Canada and the UK…
The main COVID-19 support packages from both countries centred around subsidising wages in order to keep people employed and assisting the self-employed. The full breakdown of the UK’s Coronavirus support packages can be found on our COVID-19 Business Support Hub, and Canada’s support packages include…
Canada Emergency Response Benefit
This is a package to deal with people made unemployed or those self-employed affected by COVID-19 who earn CAD1,000 or less per month. CAD2,000 is provided to individuals for a 4 week period to a maximum of 16 weeks, up to a maximum of CAD8,000.
This equates to a maximum of £4,600 so potentially less than the £7,500 self-employed grant on offer but much more than you can claim via Universal Credit for those who have lost employment.
Canada Emergency Wage Subsidy (CEWS)
This is a 75% contribution to wage costs for a maximum 12 week period – similar to the 80% on offer in the UK via the Job Retention Scheme (JRS). CWES is to a maximum of CAD847 per week so a maximum of CAD10,164. This is equivalent to £6,000 so less on offer than the 80% up to £2,500 per month via the JRS.
The main differences between the UK and Canada’s support…
The big difference between the two countries is in Canada there must have been a 15% drop in the company’s revenue in March and 30% from 1st April to 6th June, when the scheme is planned to end. There is no such requirement to prove loss of income in the UK and companies can see their revenue increase and still make a claim.
There was an interesting discussion on the Canadian government being able to make public those companies who claim the CEWS, and therefore some companies who have their own disclosure requirements have chosen not to claim, plus putting pressure on those who have the resource not to need to make a claim.
Another big difference between the two countries is the differing approaches to penalties.
In Canada, there are penalties in place for fraudulent claims announced at 225% of the claim value and possible imprisonment, though this was subsequently relaxed to 50% of the claim, forcing some companies not to risk claiming, especially if they are unsure on proving a loss in revenue. In comparison, there has been no official word on penalties in the UK yet, though likely to follow usual rules of up to 100% of claim value.
Both countries deemed it too much to perform checks on submission of a claim and will therefore retrospectively check a sample of claims once the scheme has ended.