Are you clear on the details of government’s financial schemes? Do you know what is available to you, and what the key dates are?
With so much information in the news and on social media, it’s easy to find it all a bit confusing! So, we’ve decided to break it all down and make it simple to understand, that way, you can be clear on any action you need to take and what you can claim, whatever your situation.
You may be aware that on 29th May, the Chancellor outlined details of the extension of two emergency support measures: The Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme (SEISS). There was an update on 12th June, but this did not provide much additional detail.
Coronavirus Job Retention Scheme
The Chancellor has announced how the Furlough scheme will be ‘slowly tapered’ in the coming months, as people start to return to work. 8.4 million workers currently benefit from the scheme, with 80% of their wages (up to £2,500 a month) being covered.
June and July will stay the same, but in the following months employers will be asked to contribute. Individuals will continue to receive 80% of their salary to cover the time they are unable to work. The Government support will stop in its entirety on 31st October 2020.
Here is a month by month breakdown of how it will work:
|June 2020||Furlough scheme will continue as normal. It will officially close to new entrants on 30th June. If you want to add a new entrant to the scheme (i.e. an employee that you have not yet furloughed), you will need to do this before 10th June.|
|July 2020||Furlough scheme will continue as normal, but flexible furloughing will be introduced from 1st July meaning employees can work for some of the week and be furloughed for the rest. Employers will not be able to add any new entrants to the scheme.|
|August 2020||Government will pay 80% of wages (up to £2,500). Employers will only need to cover National Insurance and employee pension contributions.|
|September 2020||Government will pay 70% of wages (up to £2,190). Employers need will cover 10% of wages plus NI and pension.|
|October 2020||Government will pay 60% of wages (up to £1,875). Employers will cover 20% of wages + NI and pension.|
A bit more about Part Time Furlough
From 1st July, businesses will be given the flexibility to bring their furloughed employees back ‘part-time’. It will be up to employers to work out what ‘part-time’ means for each of their employees and decide what their hours and shift patterns should be. Employers will be liable for staff wages for the days part-time furloughed staff are working, whilst the scheme covers the relevant remainder of hours not worked.
Self-Employment Income Support Scheme (SEISS)
The Chancellor has also confirmed that the SEISS will be extended. This will be for a final time, with a second lump sum available to people who are self-employed and have been adversely affected by Coronavirus. As previously, the grant will be paid out as a lump sum to cover the last 3 months. It will be subject to the usual Income Tax and self-employed National Insurance.
It’s important to note that you do not need to have claimed the first grant in order to claim the second, but the eligibility criteria will remain the same.
Applications for the first SEISS grant – eligible people can claim a taxable grant worth 80% of their average monthly trading profits, for three months, paid as one lump sum (up to £7,500). Please be aware that the deadline for making a claim for the first grant is 13th July. Money is paid within 6 working days of completing a claim.
Applications for the second SEISS grant – the eligibility criteria will be the same for this grant as the first one, but you don’t need to have claimed the first one to receive the second. This grant is worth 70% of average monthly trading profits, for three months, paid as one lump sum (up to £6,570). The main difference with this grant is that the business must have been ‘adversely affected’ by coronavirus. To be considered adversely affected, HMRC says a business must have either temporarily stopped trading or has been scaled back.
We hope you have found this a helpful overview and as more information becomes available, we will aim to keep you informed.
Don’t forget, we’re here to help, so if you have any questions at all about any of the support measures or would like to have a chat about our services, please do get in touch on 01942 466024 or email email@example.com