Updates to the Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme

On Friday 29 May, the chancellor, Rishi Sunak, announced further details about the extension of the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme, we’ve outlined these below for you.

Coronavirus Job Retention Scheme

There were three main changes to the scheme which begin from the end of June.

Part time furloughing

From 1 July 2020, a month earlier than previously announced, businesses using the scheme will be able to bring furloughed employees back to work part time. The government will continue to pay 80% of wages for any of their normal hours they do not work until the end of August.

Employers will be able to decide the hours the employees will return to work but will be responsible for paying their wages in full while working. This means that employees can work as much or as little as the business needs, with no minimum time that they can furlough staff for.

The agreed arrangement between a business and their employee must cover at least one week and be confirmed to the employee in writing. Employers will need to report and claim for a minimum period of a week and will be required to submit data on the usual hours an employee would be expected to work in a claim period and the actual hours worked.

However, part time work is not a requirement. If the employer does not have work for the employee, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules.

Employer Contributions

As previously mentioned, from August, employers will be expected to contribute towards claims. This will be done in stages, slowly tapering the government contribution.

In June and July, the grant will remain the same – employers will only have to pay employees for the hours they work, using the new flexible part time working.

From August, the government will continue to pay 80% of wages, up to £2,500 but employers will be expected to pay employer National Insurance (ER NICs) and pension contributions – on average, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed.

From September, the government will pay 70% of wages, up to £2,187.50 for the hours the employee does not work. Employers will have to paid ER NICs, pension contributions and 10% of the wages to make up 80% of the total, up to £2,500.

From October, the government will pay 60% of wages, up to £1,875 for the hours the employee does not work. Employers will have to pay the remainder, as before, to make up 80% of wages, up to £2,500.

Closing to new entrants from end of June

The CJRS scheme will close to new entrants from 30 June. Employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June, which means that an employee’s first furlough period must start by 10 June at the latest. Employers will have until 31 July to make any claims in respect of the period to 30 June.

Our dedicated payroll department have submitted claims on behalf of our clients and have offered support to those we currently don’t act for. If you need help or support with your claim, please get in touch with your usual EQ contact or email info@eqaccounting.co.uk.

Self-Employment Income Support Scheme (SEISS)

The chancellor also announced an extension to the SEISS for eligible self-employed people whose trade has been adversely affected by COVID-19. Those eligible, will be able to claim a second and final SEISS grant in August. They will receive 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 criteria remains the same as the first grant but people do not need to have claimed the first grant to claim the second grant.

Claims for the first SEISS grant must be made no later than 13 July and the eligible individual must make the claim themselves. The same goes for the second grant but we can ensure you have the information needed before making your claim, should you need support.

More information on the second SEISS grant will be available on 12 June.

If you require further information or support with either your CJRS or SEISS claim, please get in touch with your usual EQ or EQ contact and we can discuss this with you. Alternatively, please call one of our offices.