On Friday’s government briefing the Chancellor, Rishi Sunak, announced major changes and extensions to both the Job Retention Scheme for employees and the Self Employment Income Support Scheme. We have outlined the changes to each scheme below.
Coronavirus Job Retention Scheme
Closure of Scheme to new applicants
- The scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June. This means that the final date by which an employer can furlough an employee for the first time will be the 10 June, in order for the current three-week furlough period to be completed by 30 June.
- Employers will have until 31 July to make any claims in respect of the period to 30 June. From 1 July the scheme will only be available to employers who have previously used the scheme in respect of employees they have previously furloughed.
- From 1 July, claim periods will no longer be able to overlap months, employers who previously submitted claims with periods that overlapped calendar months will no longer be able to do this going forward.
- The number of employees an employer can claim for in any claim period cannot exceed the maximum number they have claimed for under any previous claim under the current scheme.
- From 1 July, employers can bring back to work employees who have previously been furloughed for any amount of time and any shift pattern, while still being able to claim a grant for their normal hours not worked.
- When claiming the grant for furloughed hours; employers will need to report and claim for a minimum period of a week. This has not yet been defined by HMRC.
- For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.
Costs of Furloughing
- In June and July, the government will continue to pay 80% of wages up to a cap of £2,500. If flexible furloughing is utilised from 1 July, then the employer would pay the proportion relating to hours worked.
- In August, the government will pay 80% of wages up to a cap of £2,500 for the hours the employee does not work but employers will pay employers national insurance and employers 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. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% 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. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500
- The scheme will end on 31 October 2020.
Self-Employment Income Support Scheme
- Application for the first grant of up to £7,500 will close on 13 July 2020.
- A second grant will be payable in August. The eligibility for this grant is the same as the first grant see updates number 6 & 14.
- The second grant will be paid out in a single instalment covering three months’ worth of profit and capped at £6,570 in total not £7,500.
- An individual does not need to have claimed the first grant in order to be eligible for the second grant.
- This second grant will be the final grant and the scheme will end.
We will continue providing updates during this period. If you have any queries or wish to discuss any of the above then please do contact us.
With best wishes from all the team at Geens.