Covid-19 Business Update 22 – Tuesday 3rd November 2020
Following our previous update on 26th October 2020, please find below notable changes that have been released via gov.uk.
Changes to CJRS Scheme – EXTENSION
On 31st October 2020, the Prime Minister advised that additional financial support has been released as part of the government’s plan for the next phase of its response to the coronavirus outbreak.
In doing so, the CJRS will remain open until December.
• The scheme will operate as the previous scheme did, with businesses being paid upfront to cover wages costs.
• The level of the grant will mirror levels available under the CJRS in August, so the Government will pay 80% of wages up to a cap of £2,500 and employers will pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work.
• As under the current CJRS, flexible furloughing will be allowed in addition to full-time furloughing.
• To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30th October 2020. This is a key difference to the original scheme when employees had to be on the payroll at 19th March 2020.
• Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees.
• Employers can claim the grant for the hours their employees are not working, this is calculated by using their usual hours worked in a claim period.
• Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
• When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days.
• 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 to HMRC.
• Employers will pay employer NICs and pension contributions.
• As with the current CJRS, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
Further information on when claims can first be made in respect of employee wage costs during November will be released shortly, but there will be no gap in eligibility for support between the previously announced end-date of CJRS and this extension.
The Job Support Scheme (JSS)
This was scheduled to start on Sunday 1st November, but has now been postponed until the extended furlough scheme ends.
Businesses required to close in England due to local or national restrictions will be eligible for the following:
• For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;
• For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;
• For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.
Further guidance on how to apply for the business grants will be released shortly.
Self-employed Income Support Scheme (SEISS) – EXTENSION
The Self-Employment Income Support Scheme Grant Extension will provide critical support to the self-employed.
To be eligible for the Grant Extension self-employed individuals, including members of partnerships, must:
• have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
• declare that they intend to continue to trade and either:
o are currently actively trading but are impacted by reduced demand due to coronavirus
o were previously trading but are temporarily unable to do so due to coronavirus
The extension will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period.
The first grant will cover a three-month period from 1st November 2020 until 31st January 2021. The Government will provide a taxable grant covering 40% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £3,750 in total.
The second grant will cover a three-month period from 1st February 2021 until 30th April 2021. The Government will review the level of the second grant and set this in due course.
The grants are taxable income and subject to National Insurance contributions.
The online service for the next grant will be available from 14th December 2020.
We will continue to closely monitor all developments as they progress and communicate these with you as soon as we can, to keep you fully informed.RETURN TO OUR DEDICATED PAGE FOR COVID-19 CLIENT UPDATES