Self-Employed Income Support Scheme
On 25 May 2020 we wrote about the self-employed income support scheme to provide financial help to the self-employed, with grants being paid in early June 2020, the good news is this scheme has been extended and the self-employed will be able to make a claim for a second and final grant in August 2020.
At the time of writing the online service for the second and final grant is not available.
The first grant was equal to 80% of average profits with a £2,500 a month cap, the second and final grant is equal to 70% of your average monthly trading profits, being capped at £6,750 in total.
The eligibility criteria are the same for both the first and the second and final grants, individuals will again need to confirm that their business has been adversely affected by coronavirus when applying for the second and final grant.
Tax point: The grant is taxable income.
Although the financial assistance measures are reducing for business, that is not where the story ends, the Chancellor Rishi Sunak has announced a “fiscal event” in early July, a mini budget if you like.
We anticipate an economic stimulus package to kickstart the economy, so although the self-employed income support scheme is due to end it is clear the government have more tricks up their sleeves to help the nation get back to work, once we know more we will let you know.
A point to note, 2.3 million claims have been made, worth a total of £6.8 billion in support for the self-employed.
Coronavirus Job Retention scheme
We originally wrote about the coronavirus job retention scheme on 20 March 2020 and have since covered it several more times in our blogs as we got more detail from the government. Originally intended to last until 30 June 2020 the scheme has now been extended.
The scheme will now be closed to new entrants from 30 June 2020, in practical terms that means if your staff/yourself as a company director are not furloughed before 10 June 2020 they/you will not attain the minimum three weeks furlough period before the 30 June 2020 deadline.
The extension is until 31 October 2020 but there are changes to the extended scheme.
From 1 July 2020 the scheme continues is its current form with the only change being employees will be able to return to work part time or in shift patterns and be furloughed for the normal hours not worked.
When claiming the coronavirus job retention scheme grant, the employer will need to report and claim for a minimum period of a week, this is a minimum period, those making longer claims for monthly or biweekly will be able to do so.
Employers must remember to agree with your employees any new flexible furlough arrangements and confirm that agreement in writing.
Again, it is worth pointing out, you should engage the services of a suitable qualified HR specialist as these are all changes to an employee’s contract of employment.
Employers will be responsible for paying the tax and NICs due on the employee wages for the hours worked, the government will continue to pay the tax and NICs due on the employee wages for the hours not worked.
From August the level of the grant will slowly be tapered to reflect that employees will be returning to work. The employer will pay the employers NICs and pension contributions for the hours an employee does not work.
The government will reduce its percentage from 80% to 70% of wages up to a cap of £2,187.50 (reduced from £2,500) for the hours and employee does not work. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500.
The government will reduce its percentage further to 60% of wages to a cap of £1,875 for the hours and 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.
As with the previous scheme, from 1 July 2020 employers can still choose to top up employee wages above the scheme grant to 100% of their wages at their own expense if they wish.
More specific details and information about the changes to the scheme will be made available from 12 June 2020, we will update you further after this date.
A point to note, 1 million employers have used the scheme, protecting 8.4 million jobs, worth a total of £15 billion in claims.