Update – 29th May 2020
The Chancellor led the daily briefing today announcing to the relief of many businesses in the UK, his plans for extending the Job Retention Scheme. In addition to this he also announced a 3 month extension to the Self Employed Income Support Scheme (SEISS), which is welcome news to those who are self employed.
The extension to the rules are not new schemes, and therefore if you were not eligible before, you will unfortunately not be eligible again for these schemes. We expect this to be the last financial support package that the Government will provide before looking to close down the emergency support.
With the tapering off of the schemes, comes more complicated rules. Below is details of the annoucements:
EXTENSIONS TO THE CORONAVIRUS JOB RETENTION SCHEME (CJRS)
The Job Retention Scheme will continue up until 31st October 2020, with a tapering off of the support from 80% down to 60% between August and October.
The scheme is still to run in its existing form up to 31st July 2020, which means that businesses will still be able to claim 80% of furloughed employee’s wages, plus the associated employer pension and employer national insurance costs.
There are however, two key changes and dates to be aware of in this period:
- 10th June 2020 – The furlough scheme will be closed to new employees from 30th June 2020. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30th June. This means that the final date by which an employer can furlough an employee for the first time will be 10th June for the current three-week furlough period to be completed by 30th June. Employers will have until 31st July to make any claims in respect of the period to 30th June. (This rule is still subject to the original rule that employees must have been on a reported payroll by 19th March 2020).
- 1st July 2020 – Businesses using the scheme will have flexibility to bring previously furloughed employees back to work part time/shift working, so called “flexible furloughing”. Employers will decide the hours and shift patterns their employees will work on their return, and will be responsible for paying their wages in full while working. The government will continue to pay 80% of wages for any of their normal hours they do not work up until the end of August. Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing.
If employees are unable to return to work, or employers do not have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules.
More detail is expected to be announced on the acceptable ratio between working and not working on 12th June 2020.
DECISIONS YOU NEED TO MAKE NOW
Given these dates, you will now need to decide or consider:
- If you need to take advantage of the scheme after July, you must have furloughed an employee between 1st March and 10th June, otherwise you will not be able to make a claim for that employee after June. Any employee you may wish to furlough in the future, will need to be placed on a 3 week furloughed leave by 10th June.
- Is there potential for you to operate shift or part time work, which will allow employees to work during important days or periods, while still taking advantage of the furlough scheme when there is less requirement or business activity.
- For those periods you choose to flexibly furlough an employee, can you afford to pay for their wage during this period without the Government support.
CHANGES TO THE SCHEME FROM 1ST AUGUST 2020
The scheme will start to gradually taper off, there are three key changes to be aware of:
- From 1st August 2020 – The Government will no longer support employer pension contributions and national insurance contributions. The national insurance contributions will only affect you if you have already used up your £4,000 employment allowance in this tax year.
- From 1st September 2020 – The government will taper down its support by 10% in September to 70%, with a maximum claim of £2,187.50 per employee. Employers will pay have to pay the employers national insurance, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500.
- From 1st October 2020 – The government will taper down its support by 10% in September to 60%, with a maximum claim of £1,875 per employee. Employers will pay have to pay the employers national insurance, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500. The scheme will then close down at the end of October.
With the increasing complications of these schemes, comes more delicate calculations on how much you are entitled to claim, further details and guidance for these calculations will be available from the Government website on 12th June 2020 and we are happy to assist you with the complexities of these, including advising on, calculating and making successful future claims.
EXTENSIONS TO THE CORONAVIRUS SELF-EMPLOYMENT INCOME SUPPORT SCHEME (SEISS)
The future of the SEISS scheme was uncertain going into the announcement, but we are relieved to announce that the Chancellor extended the scheme for a further 3 months, covering the months of June to August.
The amount in which the self employed can claim will be reduced from 80% to 70%, up to a maximum of £6,570. This means that you will be entitled to 87.5% of the amount of the first claim you received for the months March to May 2020.
The claim portal will open again in August, with an exact date expected to be announced on 12 June 2020.
Claims for the first SEISS grant, which opened on 13 May, must be made no later than 13 July. Eligible self-employed people must make a claim before that date to receive the first SEISS grant.
More information about the second SEISS grant will be available on 12th June.
STATUTORY SICK PAY REBATES
The portal for making an SSP claim has been opened, the link is available here.
As a reminder: if an employee:
- if an employee has coronavirus symptoms;
- are self-isolating because someone they live with has symptoms;
- are self-isolating because they’ve been notified by the NHS or public health bodies that they’ve come into contact with someone with coronavirus; or
- are shielding and have a letter from the NHS or a GP telling them to stay at home for at least 12 weeks.
Then you can place an employee on a period of sick leave and, from day 1 of the above taking effect up to a maximum of 2 weeks, claim SSP back from the Government. This may become especially important going forward with the new track and trace system implemented by the Government.
A period of qualifying sick leave should be documented between employer and employee in case of retrospective audit, the employer can opt to pay any amount to the employee during this period of leave, but the current rate that can be reclaimed back from the Government is £95.85 per week for a maximum of 2 weeks.
This scheme is different and separate to the usual statutory sick pay regulations.
You must meet the employer eligibility criteria as detailed here.
We hope you have found this information useful and please get in touch if you would like to discuss anything further.