COVID-19 – Chancellor announces further details regarding the extension of the Coronavirus Job Retention Scheme and Self-Employment Income Support Scheme.

01.06.2020
News

On 29 May 2020, the Chancellor, Rishi Sunak, announced further details about the extension of the Coronavirus Job Retention Scheme, providing support to businesses starting to bring employees back into the workforce following the coronavirus lockdown.

The Chancellor has also announced the extension of the Self-Employment Income Support Scheme, which has so far seen 2.3 million claims worth £6.8 billion.

A summary of the measures are outlined below.

Coronavirus Job Retention Scheme

The Coronavirus Job Retention Scheme (CJRS), which has enabled employers to claim support for furloughed employees’ wages from 1 March, is due to end on 31 October 2020.

Under the scheme, employers can contact HM Revenue & Customs (HMRC) to apply for a grant to cover up to 80% of furloughed employees’ wages, capped at £2,500 per month.  Currently, employees should not undertake work whilst they are furloughed.

From 1 July 2020, CJRS will be made more flexible to enable employers to bring previously furloughed employees back part time and still receive a grant for the time when they are not working.  The government will continue to pay 80% of the wages, up to £2,500 per month, along with the employer’s National Insurance and pension contributions, for the hours the employee does not work.

Employers will be responsible for the employee wages for the hours they work.

From 1 August 2020, employers will then be required to start contributing to the wage costs of paying their furloughed staff.  The government will continue to pay 80% of the wages, up to £2,500 per month, however, the grant for the employer’s National Insurance and pension contributions will no longer be available.

The employer contribution towards the wage element will gradually increase in September and October as follows:

From 1 September 2020, the government will pay 70% of wages, up to £2,187.50 per month, for the hours the employee does not work.  The employer will be required to pay 10% towards the wages, along with the employer’s National Insurance and pension contributions.

From 1 October 2020, the government will pay 60% of wages, up to £1,875 per month, for the hours the employee does not work.  The employer will be required to pay 20% towards the wages, along with the employer’s National Insurance and pension contributions.

The scheme will close to new entrants from 30 June 2020.  From this point onwards, employers will only be able to claim a grant for furlough employees that have been furloughed for a full three week period prior to 30 June 2020.

This means that the final date by which an employer can furlough an employee for the first time will be 10 June 2020, for the current three week furlough period to be completed by 30 June 2020.

Employers will have until 31 July 2020 to make any claims in respect of the period to 30 June 2020.

Please get in touch if you require any assistance with calculating the claim amounts following the introduction of the additional flexibilities or if you have any other questions on the process of the scheme.

Self-Employment Income Support Scheme

The first tranche of grants for the self-employed, including members of partnerships, under the Self-Employment Income Support Scheme (SEISS) have already been paid, ahead of schedule.  An initial grant was available for traders whose business had been adversely affected by COVID-19, which covered trading profits for the three month period 1 March 2020 to 31 May 2020.

Eligible recipients are able to claim a taxable grant worth 80% of their trading profits, up to a maximum of £2,500 per month.

Following the Chancellor’s announcement, eligible self-employed individuals, including members of partnerships, will be able to claim a second and final taxable grant.  The grant will be calculated based on 70% of the average monthly trading profits for a period of three months, up to a maximum of £6,570, and paid out in a single instalment from 17 August 2020.

The eligibility criteria for the second grant will be the same as for the first grant, however, applicants are not required to have claimed the first grant in order to claim the second grant (eg if the trade has only recently been affected by COVID-19).

If you make a claim for the second grant you will have to confirm your business has been adversely affected on or after 14 July 2020.

The online service for the second grant is not available yet, however, we expect the process will be through HMRC’s eligibility checker, as per the initial grant.

Claims for the initial SEISS grant will close on 13 July 2020, so it’s important for eligible individuals that have not yet made an application to ensure they make a claim before this date.

You will be able to make an application for the second and final grant up to 19 October 2020, at which point there is no further extension.

We will continue to keep you updated on scheme developments over the coming weeks.

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