With announcements from the UK and Scottish Governments focusing on how lockdown restrictions can be eased, there have been few updates in relation to financial and economic support. That is until this afternoon, when Rishi Sunak announced that the Self-Employment Income Support Scheme (SEISS) will be extended along with changes to the Coronavirus Job Retention Scheme (CJRS).
We should also not overlook the easing of restrictions and the impact these will have on businesses and workers and we continue to closely examine the details surrounding this. The whole GWA team take our responsibilities very seriously, particularly when it comes to the safety of our employees and clients, who may need to visit our offices to drop off documents. In line with UK Government guidance, we have updated our COVID-19 risk assessment and this can be found on our website. We have also provided some information in today’s update which you might find useful when reviewing your own business practices.
Coronavirus Job Retention Scheme (CJRS)
The Coronavirus Job Retention Scheme (CJRS) currently provides grants to cover up to 80% of the salaries of staff you have placed on furlough. The scheme was initially to be in place until the end of June but earlier this month it was announced that the scheme would be extended until the end of October, albeit with changes.
This afternoon the Chancellor set out how employers will have to start sharing the cost of the CJRS. From August they will have to pay National Insurance (NI) and pension contributions, and then 10% of pay from September, rising to 20% in October.
For the month of August, the government will continue to pay 80% of wages up to a cap of £2,500 however employers must pay NI and pension contributions. According to government figures, for an average claim, this equates to 5% of the gross employment costs that would have incurred had the employee not been furloughed.
During September, the government will reduce it contribution to 70% of wages up to a cap of £2,190. Employers will again need to pay NI and pension contributions plus 10% of wages to make up the 80% total up to a cap of £2,500. Again, according to government figures, for an average claim, this equates to 14% of the gross employment costs that would have incurred had the employee not been furloughed.
For October the government grant will reduce it contribution again to 60% of wages up to a cap of £1,875. Employers will pay NI and pension contributions plus 20% of wages to make up the 80% total up to a cap of £2,500. Using the same government calculation, for an average claim, this equates to 23% of the gross employment costs that would have incurred had the employee not been furloughed.
From 1 July, you will be able to bring furloughed employees back part-time, a month earlier than previously announced. The details of how much the government will contribute and how much the employer will contribute is not yet clear and we will advise further once details are released. However, if you chose not to bring any of your furloughed employees back part-time, the scheme will continue to pay 80% of their salaries during June and July.
It is also important to note that the CJRS will close to new entrants on 10 June 2020, which is less than two weeks away. If you have not placed an employee on furlough by that date and made at least one claim you will not be able to use the scheme for additional staff.
We appreciate that everyone’s circumstances are different, and we encourage you to contact us with your specific concerns. This very brief summary of Frequently Asked Questions may however, provide some quick answers.
- Who can can claim: Any employer with a UK PAYE scheme and a UK bank account
- What period of time does CJRS cover: From 1 March 2020 until 31 October 2020. The minimum length of furlough is three weeks.
- How much can be claimed: Until the end of July, 80% of furloughed employees’ regular wages up to a maximum of £2,500 per month, plus employers’ national insurance (NI) and auto-enrolled pension contributions. From August the revised government contributions (see above) will come into effect.
- Which employees can you claim for: Employees, including any casual or zero-hours workers, who were on payroll as of 19 March 2020, and have been put on furlough.
- Can employees do a small amount of work for if furloughed: Until the end of June, no. Any work undertaken would be considered a breach of CJRS. Employees may carry out training and voluntary work provided this does provide a service or generate revenue for their employer.
- Can some employees be made redundant and others furloughed: Yes
- Can my furloughed employees accrue holiday: Yes. Also furloughed employees can take holidays, pre-booked or otherwise.
To make a claim you must do so online via the GOV.UK website. If you are a GWA payroll client, please do get in touch as we will be able to claim on your behalf. If you are not a payroll client but have questions about the scheme, again we encourage you to get in touch.
Support for the Self-employed (SEISS)
The Self-employment Income Support Scheme (SEISS) is targeted to help self-employed individuals or if you are a member of a partnership (as long as certain criteria are met).
The scheme initially covered three months from March until end May 2020 and offered direct cash grants of 80% of average monthly trading profit over the last three years, up to £2,500 per, or £7,500 in total. This afternoon the Chancellor announced that the scheme would be extended and will pay out another single grant, albeit slightly less, covering three months up to the end of August.
The eligibility criteria will be the same for both grants and these can be found in our previous update. If you think you are eligible we do encourage you to apply for the first grant as soon as possible. If you are in any doubt about eligibility, please do contact us as we have confirmed to a number of clients who did not think they were eligible that they were able to claim. If you apply for the initial grant, you will need to do so Monday 13 July.
We understand that applications for the second grant will open in August and will offer grants worth 70% of average monthly trading profits, up to £2,190 per month, or £6,570 in total. As with the initial payment it will be provided as a single instalment covering three months’ worth of average profits. You do not need to have claimed the first grant to receive the second grant.
It was confirmed that this would be the final grant from the scheme.
Similar to the CJRS update, this announcement has only been released in the past couple of hours. As soon as we have more details, we will pass these on, but if you have any questions prior to this please let us know.
Local Authority Discretionary Grants Fund (England only)
In a previous update we highlighted a discretionary fund available via local authorities in England which has the specific purpose of assisting small businesses not eligible for the Small Business Grant Funding and the Retail, Hospitality and Leisure Grant Funding.
More details in relation to the funding have now been added to the GOV.UK website.
We are keeping a close eye on when this funding source will be open and, after speaking with local contacts, we know that Northumberland County Council are taking more time before announcing their specific eligibility criteria. As the funding is limited, it will be important to submit an application as soon as possible. If you would like to speak to us in relation to preparing an application please do, we will do all possible to ensure you are ready to be first in the queue.
Land and Buildings Transaction Tax (LBTT) extended – Scotland only
The Scottish Government is extending the time period in which homeowners have to sell their main home after buying a replacement property and be able to claim a rebate on LBTT.
Currently, if you purchase a second home you are liable to an additional LBTT at 4% of the new purchase. If the second home is a ‘replacement home’ you can reclaim additional LBTT when the old home is sold, subject to this sale being within 18 months of the new purchase. As a result of the COVID-19 crisis and the sales of property stalling, this period has been increased from 18 months to 36 months.
Workplace Guidance for Easing of Lockdown
There will be relief for many as some easing of restrictions, including a possible return to the workplace, are announced. This does pose new concerns for businesses about what this new way of working will look like and how your organisation stays healthy, safe and productive.
Although, official guidance is still “everyone should work from home, unless they cannot work from home” we would recommend not delaying your plans on preparing for when restrictions are further lifted and ensuring that no one is “forced into an unsafe workplace”.
The Health and Safety Executive have produced some useful guidance
- Working safely during the coronavirus outbreak – aimed at all employers and those who are self-employed and work with or near other people
- Talking with your workers about preventing coronavirus – aimed at all employers
Both the UK Government and Scottish Government have information that is specific to sectors including construction and other outdoor work, factories, plants and warehouses, offices and contact centres, shops, restaurants (offering takeaway or delivery) and laboratories/research facilities.
We are here to help and the partners and the GWA team can be found at their usual email addresses and phone numbers. We know there are still challenging times ahead and we are happy to provide guidance to help us all move forward as positively and successfully as possible.
Information correct as of 29 May 2020