27
Apr 2020
0

COVID-19: Canarian Government Publishes Law to Complement Sole Trader “Unemployment” Benefits

As mentioned in my article posted on the 20th April 2020, the Canarian Government approved a decree on

COVID-19: Canarian Government Publishes Law to Complement Sole Trader “Unemployment” Benefits

Business Owners, COVID-19 , , , , , Sabrina L. Williams

As mentioned in my article posted on the 20th April 2020, the Canarian Government approved a decree on 2nd April 2020 stating their resolve to make up the balance of the benefits payable by the Central Government for Sole Trader Unemployment. The decree published by the Central Government confirmed payment of 70% of the Base Rate paid each month in Social Security Contributions (a minimum rate of 944,40 euros) which is why most of you have received a payment of 661,08 euros so far, but when I saw the first notifications approving some of my clients applications, my first question was, what about the 30% the Canarian Government promised to pay?

Following on from my previous article, I can now say the Canarian Government drafted an Order on 21st April which was published this morning as Order 21st April 2020, BOC Nr. 82. This Order details the requirements to apply for the missing 30% of Sole Trader Benefits for those business owners who were either forced to close doors on 15th March 2020, or who have since experienced decreased income of at least 75% in relation to the average income taken over the previous six months. The main points to take away from this Order are as follows:

  • A fund for an initial 11 million euros has been made available for this grant
  • This grant is not automatically payable, so although you may have been notified about provisional approval from the Central Government and received the 70% payment already, this grant is only given upon request
  • Only business owners whose registered tax address is in the Canary Islands are elegible to apply
  • These business owners must (1) have been registered as self-employed at Social Security on the date of the State of Emergency -14th March 2020- (2) must have a business activity that was suspended by article 10 of the Royal Decree that authorized the State of Emergency (3) must have received approval via the Mutua of their right to receive the 70% payment by the Central Government, either due to their activity been automatically closed or to a reduced income of at least 75% as stipulated in article 17 of Royal Decree-Law 8/2020, 17th March
  • To be up to date in all State and Autonomous Region tax obligations as well as Social Security contributions
  • To fulfil all obligations established under article 14 of General Grant Laws (Ley General de Subvenciones), which basically states the applicant meets all necessary requirements for said grant and can provide proof of this, can provide accounting books etc
  • Is registered at under the Economic and Financial Registry of the Canarian Government (this can be done at the same time the application is processed if necessary)
  • This grant is applicable to self-employed persons whose activity has been suspended in virtue of Royal Decree 463/2020, 14th March and for a maximum period of one and a half months from the date of the State of Emergency
  • Upon applying, the applicant allows the Administration to verify their situation at Social Security, the National Tax Office etc., although the applicant can refuse this authorization, but they would then have to provide the necessary proof themselves
  • The applicant must sign a Sworn Declaration stating whether they are in receipt of other grants, benefits etc as a result of the State of Emergency, or a declaration to the contrary saying they have not applied for or received other grants. Details of these other benefits/ grants must be provided
  • All applications will be processed by the Administration in order of arrival
  • The Administration will review the request and determine whether the applicant meets the requirements. They may also ask for additional documents to validate the application which much be provided within 10 days. If the paperwork is not received, the application will be automatically withdrawn
  • The Administration must resolve applications within three months from the date of receipt. This deadline may be increased under extreme circumstances, but generally speaking, if the applicant is not notified within three months, it is understood the grant has not been approved due to administrative silence
  • All applications must be sent and processed online via the Regional Employment Ministry (we’ll get to that later…)
  • The amount due will be determined by applying 30% of the Base Rate payable to Social Security. If the applicant does not reach the minimum contribution period to qualify for “unemployment” under normal circumstances, the amount due will be the equivalent of 30% of the minimum Base Rate.

This last point was one of the concerns I highlighted in my previous article because the 2nd April Decree only referred to the grant being calculated on the minimum Base Rate, but many business owners contribute at a higher Base Rate. This issue has therefore been answered positively in this Order. Regarding the stipulation about not qualifying for unemployment, generally speaking and outside the current COVID-19 crisis, to qualify for sole trader unemployment, the applicant must have specifically contributed the concept of “unemployment” within the 48 months prior to closure of business and in an uninterrupted manner during the twelve months immediately prior to closure.

As can be expected, falsification of details or circumstances will be penalized by the return of any payment received as well as interest due and possible fines, however, the Administration has four years by law to reclaim, so the applicant must preserve all documents that refer to their entitlement to this grant for the same period of time.

IMPORTANT NOTE: The Decree and this Order refer to an initial fund of 11 million euros; this may be increased if necessary, but only if additional funds can be made available for this purpose, but as I mentioned previously, this grant is a “first come first served” operation, so if the funds are depleted and additional funds are not approved by the Government, any applications that are received once money runs out will be automatically rejected.

Now for the part I said we would get back to… The Order states that all applications must be sent and processed via the Regional Employment Ministry‘s online platform, but this morning I checked and the procedure has not been habilitated on their website yet and nothing has changed upon writing this article this evening. The Order was drafted on 21st April, officially released today and comes into effect from tomorrow, Tuesday 28th April 2020, so perhaps the platform will be ready by morning…?

In any case, this is a completely different application to the Central Government and it is payable in a single payment, so a message to my clients: Please email me, if you would like to apply for this additional grant so the applications can be prepared as soon as possible and filed the moment the Regional Employment Ministry updates their online platform to receive petitions. If you are not a client of this consultancy (why not?) and you applied for the Central Government benefit via your own accountant, I would recommend you contact them asap to get this application underway if you want to claim.

UPDATE 28/04/2020: In my previous article, I mentioned a few issues I had with the available information, and since last night, I have been thinking further about the Order and there are still queries/ concerns about the way the document has been drafted, namely:

1. The use of the word “grant” or “subsidy” instead of “Benefit” as the Central Government has done. This implies that any monies received must be declared as income next year on your Personal Tax Return for 2020

2. The official Summons or Notice is still pending publication on the Platform that is supposed to receive and process these applications

3. There are a couple of contradictions in the text; in one instance, a requirement is to be registered under the Social Security system on the date of the state of emergency and in the very next paragraph, they say the applicant must have cancelled registration of their business activity as a result of the activity being suspended by Royal Decree. This does not make sense because a requirement for those who receive benefits from the Central Government is to remain “active” on paper. The whole point of this is to try to prevent sole traders from closing their businesses permanently and laying off employees

4. Another contradiction is that one one hand, they refer to the grant being based on those affected as per Article 17 of Royal Decree-Law 8/2020. This article speaks about business owners whose activity was suspended due to the state of emergency, as well as those whose income has significantly decreased by at least 75%. However, in another portion of the Order, they state that business owners whose activity is not listed as one of those that were automatically do not qualify. This statement would therefore, exclude those who have suffered a lower income, so again, there seems to be a discrepancy

5. The Order talks about a single payment, however, benefits payable by the Central Government will continue for the duration of the state of emergency. Since this is supposed to be a complementary payment to make up 100% of the Base Rate, shouldn’t the payments continue in line with the Central Government’s?

Further information may be available over the next few days to clarify some of the details included in this Order, and most of the Decrees and Orders published since the State of Emergency began have been followed up with clarifications and corrections which may be the case here.

There have been whispers about the progressive lift of restrictions and the possibility of extending lockdown measures until the end of May, so I imagine further news will become available about that shortly too.

25
Apr 2020
1

COVID-19: New Order Lets Children Exercise Outside (for an Hour)

As the restrictions placed upon us begin to take their toll on most adults, the younger population has

COVID-19: New Order Lets Children Exercise Outside (for an Hour)

COVID-19 , , , , Sabrina L. Williams

As the restrictions placed upon us begin to take their toll on most adults, the younger population has been waiting impatiently for the day when they may be able to see the outside world again. Sunday 26th April is that day! Today, the Health Minister, Salvador Illa Roca has signed Order SND/370/2020, 25th April that details why and how children can finally (and safely) leave their homes for some much needed exercise.

The State of Emergency has been extended three times since 14th March 2020; the last time was on 24th April when it was extended until 10th May 2020. Schools and other educational centres closed prior to the state of emergency, which means children have been cooped up at home for more than SIX WEEKS, and some do not have access to a garden, terrace or even a balcony at home!

It only stands to reason this is having a major effect on them both physically and mentally, and this has not gone unnoticed by the United Nations’ Comittee on the Rights of the Child. This committee has called upon governments to alert them of the long term physical, psychological and emotional damage these new circumstances could be causing.

For this reason, the Order allows children to go outside for an hour a day for some relief from the imposed quarantine. When they say “children”, they refer to those under the age of fourteen and these outings must be supervised by an adult at all times. The best way to continue is to list the conditions:

1. Daily outings are permitted for a maximum of ONE HOUR

2. The maximum distance you are allowed to venture away from home is ONE KILOMETRE

3. The limits have been set between 9am and 9pm

4. Children who show symptoms of COVID-19 or have been exposed to somebody who has the virus must continue to self-isolate at home and are not permitted to participate in these daily outings

5. This Order does not affect exceptions/ permitted activities for minors as per Royal Decree 463/2020, 14th March

6. Daily exercise can be formed in groups of a maximum of one adult in charge and three children who live in the same home (you cannot take your neighbour’s children or get together with other parents and children)

7. A safety distance of at least 2 metres must be maintained between your group and others who are out and about as well

8. You are permitted to use public streets and areas, to include natural landscapes and authorized green areas that are within one kilometre of your home. Activities at playgrounds and sports installations are not permitted

9. If the accompanying adult is not the child’s parent, they must provide a signed authorization from them (tutor, legal guardian, nanny…)

10. The accompanying adult must ensure sufficient steps are taken to prevent contagion on these outings

This Order comes into effect from midnight on 26th April 2020 until the end of state of emergency or any posible extensions.

Enjoy your newfound freedom and stay safe 🙂

20
Apr 2020
0

COVID-19: State and Canarian Financial Aid for the Self Employed (a must read!)

Over the past few days, there has been more movement regarding financial aid for sole traders and business

COVID-19: State and Canarian Financial Aid for the Self Employed (a must read!)

Business Owners, COVID-19 , , , , , , , , , , Sabrina L. Williams

Over the past few days, there has been more movement regarding financial aid for sole traders and business owners. Social Security confirms that on Friday 17th April 2020, 919.173 self-employed persons received payment in what is the first outlay of benefits that amounted to approximately 670,9 million euros. On 15th April, the record shows that 1.016.670 business owners have applied for this financial aid, so there are more payments on the way in case you have not received yours yet, but congratulations to all those who have, it must feel like winning the Golden Ticket from a Wonka Bar!

One very important detail that I noticed when I received the first notification that a client’s application had been approved was that it only confirmed payment of 661,08 euros. The Central Government stated in Royal Decree-Law 8/2020, 17th March that they would pay 70% of the base rate that determines how much Social Security we pay each month, so this amount coincides with that, however, the Canarian Government said it would pay the remaining 30% to all residents of this region. The minimum base rate is 944,40 euros, so where is the missing 283,32 euros?

While I have been reading through legislation and corrections on a daily basis from the Central Government, perhaps I have not been monitoring Canarian legislation quite as closely, but to be fair, they have been pretty quiet about financial measures since announcing they would pay the balance and nothing has been reported on the news either. Also, we (other professionals and I) thought that since the Mutuas have been charged with processing Sole Trader Unemployment Benefits, this would be automatically included once they approved the application, but this has not been the case, so I’ve been investigating the matter further.

The Canarian Government published a decree that has almost gone unnoticed (you’ll find out why in a minute), Decree-Law 4/2020, 2nd April and Article 3 confirms that 11 million euros has been made available to business owners who qualify. Upon reading the decree, the following stood out to me in particular:

1. Financial Aid will cover the missing 30% of the minimum base rate. What is my query here? Well, not everybody pays the minimum rate; some business owners contribute at a higher rate, so I’m not sure if they will be paid as per their contributions or whether it will be limited to the minimum.

2. The decree refers to this financial aid as a “grant” or “subsidy”, terms that are often used to help get new businesses off the ground, but these are not necessarily “free” if you can see what I’m getting at. The Central Government uses the expression “Social Security Benefit”, so it will be interesting to see whether any strings are attached to receiving this payment or not, but it is feasible that it will be done exactly at the President of the Canarian Government announced and I am overthinking the terminology that has been used as in Spanish there are other variations of the word “grant”.

I have contacted the Canarian Government to verify the procedure to obtaining the missing 30% since it has not been automatically added to the payments received. The response I have received so far confirms that although the Decree was authorized, additional steps such as how to apply for this financial aid, conditions etc have not yet been approved, but the Canarian Government hopes to publish terms and procedure next week (not guaranteed). I am still awaiting a response with regards to my concerns, but I imagine we will have to wait until a new decree is published to find out so watch this space.

For those whose application has been accepted, you are exempt from paying Social Security contributions until the State of Emergency comes to an end. However, the Administration still has the right to verify that you qualify for these benefits, so they may require additional paperwork to confirm, but to date, 97,3% of all applications have been approved without incident.

There is still one very important issue to discuss… what about Social Security contributions that were charged on the 31st March? Social Security did not implement measures prior to this date, which meant that everyone was charged a full month’s contribution, even who have had to close doors since 15th March. As mentioned in the previous paragraph, business owners in this situation are exempt. A tweet from their official account says that the contribution will be refunded without the need to apply, and further investigation indicates this will happen in the second half of May.

INTERESTING STATISTICS:

The retail sector has filed the majority of all applications (123.883) followed by the hospitality industry (112.854) and construction (68.560)

The worst affected autonomous regions are Andalucía, Cataluña and the Comunidad Valenciana.

17
Apr 2020
1

COVID-19: Lockdown Restrictions 101

I do remember a time when my post’s titles did not begin COVID-19! Since the country entered into

COVID-19: Lockdown Restrictions 101

COVID-19 , , , , , Sabrina L. Williams

I do remember a time when my post’s titles did not begin COVID-19! Since the country entered into a State of Emergency on that fateful Saturday 14th March 2020, there have been many articles in the media about the restrictions that have been imposed on us, but although we have now been in lockdown for just over a month, there is still a lot of confusion about what we are allowed and not allowed to do. Let’s recap…

The Directorate of the Nacional Police issued this document that explains different scenarios, and here I’m going to summarize the key points so you can be informed and more importantly stay safe (and avoid potential fines!):

1. Royal Decree 463/2020, 14th March (amended by Royal Decree 465/2020, 18th March) states that we are restricted in our movements. We can only move about on streets or public areas for the following activities, and even then, they must be done individually unless we must accompany a minor, a person with discapacities, the elderly or another justifiable cause:

a) To buy food, medication or essential items

b) To go to hospitals, clinics or other medical centres

c) To travel to and from the workplace or for business owners to carry out services

d) To return to our primary residence

e) To look after the elderly, minors or other dependents

f) To travel to and from banks and insurance companies

g) For emergent cases

h) Other activities of a similar nature

What happens if you get stopped by police forces when carrying out any of the above activities? You would be required to produce justification of your journey such as a receipt from the shop for your purchases or an appointment slip or doctor’s report for example. The police may ask for proof of address to determine whether your trip is justified, so if you venture too far from home, you may be cautioned or fined and told you must shop more locally.

As you know, children are not permitted to leave home unless it is strictly necessary (hospital visit for example), but if the child lives in a single-parent environment and cannot be left at home alone, they may accompany the parent. Do not abuse this because if the child is considered old enough to remain at home unsupervised while the parent goes shopping for example, the police could take action so just because the child may be under the age of 18, it does not mean they must go everywhere with you.

Another important question that has arisen is again about children and those parents who have shared custody. This document indicates that movement is permitted to collect and drop the children off at their respective parents’ homes. In this situation, the police would require the legal ruling , divorce or custody agreement as proof.

We’ve all seen memes about dog sharing as the perfect excuse to get some fresh air, and there was the fantastic case in Lanzarote about a guy who was fined for taking a COCKEREL out for a walk with a piece of string! Dog owners are allowed to walk their dogs, BUT… this must not be abused either. Only short walks are permitted so the dogs can do their business (obviously all responsable owners will clean up the mess!) and no contact with other dogs or owners is allowed. They recommend going out at the least busy times when you may come across other owners, but more importantly, YOU MUST NOT VENTURE TOO FAR FROM HOME. The police WILL verify your address and recently, a woman in Lanzarote was fined for putting her dogs in her car and driving 5km to a spot where she wanted to walk her dogs.

If you own other types of animals, you are permitted to go out to buy food etc for them and if they should get ill, vets are authorized to work.

Thanks to social workers, some rules have been relaxed for certain people who have discapacities or those who are on the autistic spectrum because extreme lockdown regulations and the upset to their normal routine is very distressing for them, so they may go out for accompanied walks maintaining social distancing measures. The police may require a medical report if their condition is not visibly obvious to the officer.

The use of communal areas within communities of owners is prohibted and the president may be required to seal off said areas if necessary.

The homeless are permitted to remain on the streets as they do not have permanent residence, however many are being relocated to social housing while the crisis lasts. In La Oliva, many have been moved to the Municipal Sports Centre where food is also being distributed.

You are not permitted to travel to your second home if you are lucky enough to have one.

For the duration of the State of Emergency, no religious service may be held. A máximum of three persons besides the minister are permitted to attend funerals or cremations.

This following point has been a major issue. How must we travel in cars if we have to go out? Travel is only acceptable for the above-mentioned approved activities or to fuel up at a petrol station. If more than one person is in the vehicle, they must be in the back seat or if there is more than one row of seats, ONE PERSON PER ROW maintaining as much separation between them as possible. If more than one person is in the vehicle, their presence must be for a valid reason.

Many businesses have sadly been forced to close down for the duration, but other business activities are still authorized. Although they are working behind closed doors for the most part, there are rules to ensure social distancing.

Employees are required to carry a certificate issued by their boss stating their job, address of the workplace and work hours. This document must be signed and stamped. Alternatively, they may also carry their last payslip or work contract as proof.

Athough it is perfectly legal for business owners to continue their activity, they must also carry documents as evidence, such as business registration documents, their last tax return or their Municipal Opening Licence (I did chuckle at that last one because in La Oliva, official Opening Licences are like gold dust, it is rare to see one!)

This lockdown is taking a toll on everybody and we are starting to see individuals starting to break the rules and go out for non-essential purposes, to go for a run, to take their children out for a walk or even to visit Friends. There is a reason why we are doing this, so to deliberately flaunt the rules puts others at risk and creates scenarios where the virus could spread further. Remember, we are staying home to relieve the National Health Care System, so with that in mind, lets be considerate and hopefully restrictions will be lifted sooner than expected.

I hope this summary has helped those who still had doubts about regulations. You can read the document for yourselves, albeit in Spanish here. If you’re anything like me, since this started, I find myself telling people on the TV screen, they are standing too close together! It is pretty scary how quickly we have adapted to this situation and now physical proximity or contact with others now feels alien.

15
Apr 2020
2

COVID-19: Extended Deadline for First Quarter 2020 Taxes

Since last Friday, we have heard whispers the National Tax Office may postpone the date to file taxes

COVID-19: Extended Deadline for First Quarter 2020 Taxes

COVID-19 , , , , , , , , , , Sabrina L. Williams

Since last Friday, we have heard whispers the National Tax Office may postpone the date to file taxes for the first quarter of this year, but this was not debated until yesterday, and finally published this morning. Royal Decree-Law 14/2020, 14th April is the latest addition to a growing list of laws that have been approved in the month since the entire country has been in a State of Emergency.

This new decree states that the deadline to file taxes has been extended to 15th May 2020 (that is for accountants to file the returns) with payment due on 20th May 2020, as long as the sole trader or company’s income did not exceed 600.000 euros in 2019 (which means approximately 95% of all businesses in Spain will benefit from this change).

The Treasury Minister and Spokesperson for the Government, MarĂ­a JesĂşs Montero said in yesterday’s press release that this measure will help businesses fulfil their tax obligations and allow for better cash flow under these difficult circumstances. Associations that represent accountants, economists and the like have rallyed the Tax Office to take this step because of difficulties in contacting clients, obtaining the necessary paperwork etc., but the Tax Office has had a long time to make this decision and has chosen to wait until the deadline to make it official.

I would like to say a massive THANK YOU to all of my clients who have been fantastic throughout this situation. They managed to get their accounts to us and we were able to input their documents and advise them of the tax result before the deadline just in case the Tax Office did not back down. Although most taxes were filed, they won’t be charged to your bank accounts until 20th May 2020 as shown in the decree. All requests for payment of these taxes in installments will also be honoured.

On another note, I have some statistics of interest for you:

* 941.000 applications for sole trader unemployement have been registered

* 396.000 sole traders and companies have applied for ERTEs (suspended contracts for their employees)

* 36.048 employees who have either contracted the virus or have had to self isolate are receiving financial aid in concept of Professional Illness

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