Background
On Friday the Chancellor, Rishi Sunak, announced further details on the extension of the Coronavirus Job Retention Scheme (CJRS) as the Government seeks to continue to support jobs and business as people return to work. The announcement included the option of improved flexibility to bring furloughed employees back part time in July, and a new taper requiring employers to contribute modestly to furloughed salaries from August. This update followed the announcement of the extension of the scheme on 12 May 2020.
The Chancellor also outlined continued support for the self-employed with the announcement that the Self-Employment Income Support Scheme (SEIS) will be extended so that eligible individuals will be able to claim a second and final grant in August 2020 capped at £6,570.
The update to both schemes will apply to the whole of the UK.
Summary measures for business
Job Retention Scheme – Update:
From 1 July 2020, businesses will be given the flexibility to bring furloughed employees back part time. This is a month earlier than previously announced to help support people back to work. Individual firms will decide the hours and shift patterns their employees will work on their return, so that they can decide on the best approach for them. The employer will be responsible for paying their employees’ wages while in work, but will still be able to claim the CJRS grant for the employees normal hours not worked.
From August 2020, the level of government grant provided through the job retention scheme will be slowly tapered to reflect that people will be returning to work, with businesses asked to contribute a modest share. Crucially individuals will continue to receive 80% of salary covering the time they are unable to work.
In summary, the updates to the CJRS mean that the following will apply over the next few months for the period employees are furloughed:
- June and July:
– The government will continue to pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and employer pension contributions.
– Employers will not be required to pay anything.
- August:
– The government will pay 80% of wages up to a maximum of £2,500.
– Employers will pay ER NICs and pension contributions – for the average claim, the government estimates this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.
- September:
– The government will pay 70% of wages up to a maximum of £2,187.50.
– Employers will pay ER NICs and pension contributions and 10% of wages to make up the 80% total up to a maximum of £2,500.
- October:
– The government will pay 60% of wages up to a maximum of £1,875.
– Employers will pay ER NICs and pension contributions and 20% of wages to make up the 80% total up to a maximum of £2,500.
Employers will continue to be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked. Employees who believe they are not getting their 80% share can also report any concerns to the HMRC fraud hotline. HMRC have stated that they will not hesitate to take action against those found to be abusing the scheme.
Closure of CJRS from July 2020
As part of the introduction of part time furloughing, claims under the job retention scheme will close to new entrants from 30 June 2020. From this date, employers will only be able to furlough employees who have been furloughed for a full three-week period prior to 30 June. This means the final date for an employer to furlough an employee for the first time will be 10 June 2020, in order for the full three-work furlough period to be completed by 30 June 2020.
Support for the Self-Employed – update:
The Coronavirus Self-employment Income Support Scheme (SEIS) will continue to allow an eligible individual to claim the first SEIS grant until 13 July 2020. Under the first grant, individuals can claim a taxable grant worth 80% of their average 3 monthly trading profits up to a maximum of £7,500 in total.
From August 2020 individuals will be able to claim a second taxable grant worth 70% of their average monthly trading profits. As for the first grant this will be payable in a single instalment covering three months’ worth of profits, and will be capped at £6,570.
The eligibility criteria is the second grant is the same as for the first grant, and individuals will again need to confirm that their business has been adversely affected by COVID-19.
An individual does not need to have claimed the first grant in order to claim the second grant.
The above is only an outline of the information currently available and the government will publish further guidance surrounding the second SEIS grant on Friday 12 June 2020.
The government has produced a factsheet which includes further details on the updates to both schemes and is available by using the following link – Factsheet for SEISS and CJRS schemes.
Our updated working arrangement – We remain ‘Open for business’
From today our staff will return to office based working on a rota basis, each attending one day a week, whilst continuing to work from home at other times. They can still be contacted in the usual way either via email or by calling the office number where reception will divert your call to the appropriate staff member.
Should you have any questions regarding the updates to the schemes outlined above, require any assistance in making claims under the new measures or have any other query relating to the current situation, please speak to your usual contact at the firm.
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