As mentioned in our article The application of the NOW scheme to group companies is being amended The announced amendment to the Temporary Emergency Measure to Safeguard Employment (NOW) is published. The change comes into effect on 5 May 2020.
Group turnover down < 20%
It was already known that only groups experiencing a fall in turnover of less than 20% at group level would be eligible to apply for the NOW scheme on behalf of individual group companies. Naturally, the individual group company must have experienced a fall in turnover of 20% or more.
Conditions
Companies wishing to take advantage of the relaxation must meet the following conditions.
- The grant application was submitted after the amended group scheme came into force.
- No more than half of the activities of an individual group company consist of the provision of labour within the group.
- The employer acts in accordance with an agreement entered into with the trade unions prior to the grant application (in the case of employers with fewer than 20 employees: with employee representatives).
- Prior to the application, the group head declares that, for 2020 (up to the date in 2021 on which the meeting is held to adopt the annual accounts), no dividends will be paid to shareholders, not to repurchase any shares, and not to pay any bonuses to the Board of Directors and the management of the group and of the group company to which the scheme applies.
- The other companies within the group do not carry out any assignments or projects that could be to the detriment of the company for which the decline in turnover is determined under the scheme (if this does occur, adjustments will be made accordingly).
- When calculating turnover, the same transfer pricing rules are applied as in 2019, and changes in the stock of finished goods are allocated to turnover.
If these terms and conditions are breached, the grant will be set at zero (and any advance payment made will be recovered). This also applies if the decline in turnover for the group as a whole is 20% or more.
Audit by the auditor
The auditor must examine retrospectively whether:
- no activities have been transferred to the other group companies;
- due account has been taken of the secondment of staff within the group;
- the correct transfer prices have been applied;
- the stock movement for finished goods has been processed correctly.
Standards for these audits are being drawn up in consultation with the NBA.
Disclosure
Applicants for the NOW grant under the amended group scheme are deemed to have given their prior consent to the possible disclosure of information contained in the grant application file. As this information may be commercially sensitive, the Government Information (Public Access) Act does not permit its disclosure without further ado. The applicant’s prior consent prevents the UWV from having to consult the applicant on this matter. The information to be disclosed is limited to the company details, the advance payment received by the applicant and the final grant amount.