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On November 17, 2020, the U.S. Internal Revenue Service (“IRS”) posted new FAQs providing that an acquisition of the stock or assets of a company that has received a loan under the Paycheck Protection Program (the “PPP”) generally will not cause the acquirer and members of its aggregated employer group (as defined below) to jeopardize their employee retention tax credits (“ERTCs”).  While the FAQs expressly provide that they cannot be relied upon by taxpayers, and could be withdrawn at any time, the posting of these FAQs is a very welcome development after months of requests for guidance.  Although not specifically…
The UK Chancellor has today announced that the Coronavirus Job Retention Scheme (the furlough scheme) and the Self-Employment Income Support Scheme (SEISS) will be extended against “a worsening economic backdrop”. Earlier this week we reported on the UK Prime Minister’s reintroduction of the furlough scheme until 2 December 2020 (the scheduled end date of the national lockdown) and an extended SEISS grant for the self-employed to 80% of average trading profits for November (https://www.proskauertaxtalks.com/2020/11/covid-19-extension-of-economic-support-ahead-of-national-lockdown/). Today’s announcement goes further: the furlough scheme will now be extended until the end of March 2021 (with a review in January 2021) and…
Ahead of England’s return to national lockdown this Thursday, the UK Prime Minister has announced the extension of support packages for both employed workers and for the self-employed. As reported by us previously (https://www.proskauertaxtalks.com/2020/09/uk-chancellor-announces-winter-economy-plan/) the Coronavirus Job Retention Scheme (the furlough scheme) was due to end and its replacement, the Job Support Scheme, was to commence on 1 November. In conjunction with the Prime Minister’s announcement of this month’s national lockdown, the furlough scheme is being extended until 2 December 2020 and the Job Support Scheme is being postponed until that date. The extended furlough scheme will broadly…
As coronavirus infection rates rise and restrictions tighten across the UK, the UK Chancellor has extended the Job Support Scheme (again). Last week we reported on the extension of the Scheme to businesses legally required to close under tier 3 of the alert system (https://www.proskauertaxtalks.com/2020/10/covid-19-extension-of-the-uks-job-support-scheme/). Yesterday (22 October) the UK Chancellor announced the following updates: Employees must work a minimum of 20% of their usual hours per month (previously 33%) and the employer’s contribution for non-worked hours is 5% (previously 33%), capped at £125 per month. The government will pay 61.67% of hours not worked, up to a…
As lockdowns loom across the land with the introduction of a three-tier system of restrictions based on local COVID-19 alert levels, at the highest alert level (tier 3) certain businesses will be forced to close, including pubs and bars (unless they serve substantial meals). To support businesses that are legally required to close as a result of the restrictions, the Job Support Scheme announced as part of the UK Chancellor’s Winter Economy Plan (reported by us https://www.proskauertaxtalks.com/2020/09/uk-chancellor-announces-winter-economy-plan/) is extended. Below are the key points: The government will pay two-thirds of each employees’ salary up to a maximum of £2,100…
As the UK braces itself for a second wave of COVID-19 the UK Chancellor has announced the Treasury’s Winter Economy Plan with the aim of protecting jobs and supporting businesses over the coming months. Despite the measures introduced in the Chancellor’s Summer Statement (reported by us https://www.proskauer.com/blog/chancellors-summer-statement-focuses-on-hospitality-sector), the UK’s economic recovery “is fragile” amidst the rising number of infections. Key points to note from today’s announcement: A new Job Support Scheme will be introduced from 1 November for six months with the aim of protecting “viable” jobs for those that have had to reduce their hours because of the…
On July 27, 2020, Senate Republicans introduced a series of bills and proposals that have been collectively referred to as the “Health, Economic Assistance, Liability Protection and Schools Act” (the “HEALS Act”).[1] The HEALS Act would enhance and expand certain provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) (H.R. 748), and provide additional forms of relief, including certain tax credits for employers. This blog summarizes the most important tax proposals in the HEALS Act and compares them with the Health and Economic Recovery Omnibus Emergency Solutions Act (the “HEROES Act”)[2] that was…
As the UK’s lockdown is relaxed and unemployment figures are expected to continue to rise, the UK Chancellor gave his summer statement announcing measures to stimulate the economy as it recovers from the effects of coronavirus with a clear emphasis on encouraging people to spend money, particularly in the hospitality sector, to try to protect as many jobs as possible. The UK Chancellor stated the stark fact that in the space of two months during the pandemic the UK’s economy contracted by 25%, which is the same amount as it grew in the previous eighteen years and the IMF expects…
Originally published on April 2, 2020. Last updated as of June 9, 2020. On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act (H.R. 6201), and on March 27, 2020, he signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) (H.R. 748).  This alert summarizes certain tax-related provisions of these new laws and has been updated to reflect subsequent guidance from the Internal Revenue Service (the “IRS”) on these provisions, and the Paycheck Protection Program Flexibility Act of 2020 (H.R. 7010). Sick and Family Leave Credits. Beginning April 1, 2020,…
The UK government has opened a consultation on draft legislation concerning the taxation of coronavirus business support payments. HMRC want views on the technical effectiveness of the proposed legislation in ensuring that grants covered by the legislation are subject to tax. Such grants include the much-reported Coronavirus Job Retention Scheme (“CJRS”) (as reported by us https://www.proskauer.com/blog/uk-government-announce-coronavirus-job-retention-scheme) and the Self-Employment Income Support Scheme (“SEISS”) (as reported by us https://www.proskauertaxtalks.com/2020/03/covid-19-uk-chancellor-announces-measures-to-support-the-self-employed/) introduced by the UK Chancellor. The legislation will also apply to: (a) the Small Business Grant Fund, the Retail, Hospitality and Leisure Grant Fund and the Discretionary Grant Fund, (b)…
Originally published on April 8, 2020. Updated as of May 20, 2020. In an effort to halt the spread of the novel coronavirus Covid-19 (“Covid-19”), on March 14, 2020 the French government mandated a shut-down of non-essential businesses and other venues open to the public. The shut-down ended on May 11, 2020. Among the businesses concerned were retail stores, shopping centers, and restaurants. Businesses were authorized to continue their online activities and related deliveries. The shut-down did not impact businesses that are considered “essential to the life of the nation”, such as food shops, drugstores, banks, and gas stations (the…
In light of COVID-19, and in response to requests from European trade associations, the European Commission has published its proposal to amend Directive 2011/16/EU which deals with various strands of administrative co-operation in the field of taxation. Significantly, the proposal includes an extension to the time limit for reporting information under the new rules on cross-border tax arrangements know as DAC 6 (implemented by Council Directive 2018/822/EU). Many member states have already implemented DAC 6 in domestic legislation. However, a lack of detailed guidance, the potential for differences in interpretation of key terms in DAC 6 between member states and…
On May 12, 2020, House Democrats introduced the Health and Economic Recovery Omnibus Emergency Solutions Act (the “HEROES Act”) (H.R. ___), a $3 trillion stimulus bill that would provide additional relief in response to the COVID-19 pandemic and resulting economic downturn.  The HEROES Act would eliminate the limitation on the deduction for state and local taxes for 2020 and 2021 and enhance and expand the earlier Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) (H.R. 748) and the Families First Coronavirus Response Act (the “FFCRA”) (H.R. 6201). However, the HEROES Act would also reverse some of…
We continue our blog series on COVID-19 implications on executive compensation matters with a post that addresses considerations relating to amending performance goals under equity and other incentive awards. Setting meaningful and effective performance goals often requires significant focus and analysis by compensation committees with the assistance of their advisors and management.  In light of current economic challenges, stock price volatility and business uncertainty surrounding COVID-19, performance goals and the corresponding targets governing annual and multi-year cash and equity-based incentive awards established in early 2020 or prior will likely not be achieved for many companies.  Accordingly, companies that sponsor these…
On May 6, 2020, Senators Chuck Grassley (R. Iowa) and Ron Wyden (D. Ore.), the Chair and Ranking Member of the Senate Finance Committee, introduced the Small Business Expense Protection Act of 2020 (S. ___),[1] which would reverse a recent Internal Revenue Service (“IRS”) Notice and permit deductions for expenses that relate to loan forgiveness under the Small Business Administration’s Paycheck Protection Program (the “PPP”). On May 8, 2020, a bipartisan group of Representatives introduced the Jumpstarting Our Businesses’ Success Credit Act (the “JOBS Credit Act”) (H.R. ___), which would expand the employee retention tax credit available…