Friday 27 May - Rishi announces new measures to kick-start our economy.
“As Britain returns to work, we need to adapt … “
The Chancellor has announced changes to the Coronavirus Job Retention Scheme (CJRS) to give “businesses the flexibility to decide what is right for them”. Furloughed workers can return part-time from 1 July 2020 although employers will need to make modest contributions from August 2020.
To ensure fairness, the Self-Employment Income Support Scheme (SEISS) is being extended into August.
Coronavirus Job Retention Scheme (CJRS)
Continuing to support employers and employees to get people back to work, Rishi has announced an extension to the ‘furlough’ scheme. There have also been a few changes to the scheme (which is now referred to as ‘flexible furloughing’) coming into action from 1 July 2020.
Rishi has put in place a step plan to help employees get back to work:
- From 1 July 2020, employers can start to bring back furloughed employees into the workplace. Hours of work, which must cover at least one week, are to be agreed between the employer and employee in writing; the employee will receive full pay for the hours they work during this ‘flexible furlough period’ whilst the employer will still be eligible to claim the maximum CJRS grant when the employee is not working (i.e. the 80% capped at £2,500 per month and associated employers national insurance contributions and auto-enrolment pension contributions). This arrangement will continue to 31 August 2020 and, from 1 July 2020, the three-week minimum furlough claim period has been removed.
- From August, there will be no changes to the grant but the Government is asking employers to pay the employer NI contribution and pension auto-enrolment contributions.
- From September, the Government will reduce their contributions to 70% of furloughed salary (up to £2,187.50) and the employer will pay the 10% (to make up to the 80%) plus NI contribution and pension auto-enrolment contributions.
- From October, the Government will further reduce their contributions to 60% of furloughed salary (up to £1,875) with the employer paying 20% plus NI contribution and pension auto-enrolment contributions.
The furlough scheme will close to new entrants on 30 June 2020. Employers wanting to furlough employees before then will need to action this by 10 June 2020 (three weeks before).
The Chancellor has confirmed that the furlough scheme will end on 31 October 2020.
Self-Employment Income Support Scheme (SEISS)
A second round of SEISS payments for the self-employed has been introduced. Slightly less generous than the first, the plan is to make available a single taxable payment of 70% of average monthly trading profits over a three-month period (capped at £6,570). The self-employed will have to wait to make their claim, this second (and final) opportunity to claim this additional one-off payment won’t be available until August.
If you are self-employed and your business has been adversely affected by Coronavirus, you have until 13 July 2020 to make your first claim under the SEISS of up to £7,500. If your business has only recently been affected, you don’t have to have claimed the first payment to be eligible to claim the second.
Sadly, the actual claim itself is something we can’t do you for your but we can help you gather all the information you need to make a successful claim. More information should be available by 12 June 2020.
As ever, if you need any help or assistance with CJRS, the SEISS or would just like to talk to us about managing your cashflow and planning for recovery during the coronavirus pandemic, please do not hesitate to call us on 01223 810100.