Update – Coronavirus Job Retention Scheme (CJRS)
Chancellor Rishi Sunak has announced three changes to the Coronavirus Job Retention Scheme (CJRS) with the aim of working life slowly returning to normal over the next few months.
1. As of 1st June the scheme will close for any new applicants, with the final date an employee can be furloughed from being 10th June. Employers will then have until 31st July to make any claims for the period to 30th June.
2. As of 1st July 2020 employers will be able to bring previously furloughed employees back part time and still receive a grant for the time when they are not working. This change has come a month early as the government is keen to encourage employees back to work to aid the slowing economy. The employer will decide the hours and will be responsible for paying the employee’s wages in full for the time they have worked. The working hours must cover at least one week and be confirmed to the employee in writing.
3. As of 1st August 2020 the wages grants provided by the government to many businesses will slowly be tapered, meaning employers will have to start contributing to the wage costs of their furloughed staff. Details are as follows:-
• In June and July the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance and pension contributions for the hours the employee doesn’t work. The employer will have to pay their staff for the hours they work.
• In August the government will continue to pay 80% of wages up to a cap of £2,500 but employer will pay employer National Insurance and pension contributions.
• In September the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work, the employer will pay employer National Insurance, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500.
• In October the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work, the employer will pay employer National Insurance, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500.
Update – Self Employment Income Support Scheme (SEISS)
The Chancellor has also announced plans to extend the Self Employment Income Support Scheme (SEISS) for those people whose trade continues to be, or is newly, adversely affected by COVID-19. Eligible sole traders will be able to claim a second and final grant in August; this will be a taxable grant worth 70% of their average monthly trading profits for three months, paid out in a single instalment and capped at £6,570 in total.
The eligibility criteria for the second grant will be the same as for the first grant. People do not need to have claimed the first grant to claim the second grant: for example, their business may have been adversely affected by COVID-19 more recently.
Claims for the first SEISS grant, which opened on 13th May, must be made no later than 13th July. Eligible sole traders must make a claim before that date to receive the first grant (a taxable grant of 80% of their average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total). So far, there have been over 2.3 million claims worth an estimated £6.8 billion.
It’s really important to note that, as with the first grant, the eligible individual must make the claim themselves. Us Accountants are not allowed to claim on your behalf.
More information about the second SEISS grant will be available on GOV.UK on 12th June.
As always, if you have any questions, please do not hesitate to contact us.