9th July 2020
We’ve created an easy to read contractor’s fact sheet to the temporary package set out by the Chancellor to support struggling businesses in this period of disruption caused by COVID-19.
Job Retention Scheme
- A temporary scheme open to all UK employers for 4 months starting from 1 March 2020.
- Open to all employers with a PAYE payroll scheme started before 19 March 2020.
- Salaried company directors are eligible to receive support through this scheme.
- Employees that were employed as of 28 February 2020 and on payroll and were made redundant or stopped working for the employer after that and prior to 19 March 2020, can also qualify for the scheme if the employer re-employs them and puts them on furlough.
- Need to designate and notify affected employees as ‘furloughed workers’ for a minimum of three weeks at a time.
- Use HMRC’s calculator to work out the amount you can claim before applying via your Government Gateway account.
- HMRC will reimburse 80% of furloughed workers wages up to £2,500 per month.
- Full details on the scheme can be found here and a guide to claiming here.
UPDATE 29 May 2020:
- From 1 July, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim CJRS grant for their normal hours not worked. When claiming the CJRS grant for furloughed hours employers will need to report and claim for a minimum period of a week. Note: Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours.
- The scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full 3 week period prior to 30 June.
- The final date by which an employer can furlough an employee for the first time will be 10 June, in order for the current 3 week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.
From August 2020, the level of government grant provided through the job retention scheme will be slowly tapered and businesses will be asked to contribute.
- July: The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything.
- August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions
- September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
- October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.
Job Retention Bonus
This is a one-off payment of £1,000 to employers that have used the Coronavirus Job Retention Scheme (CJRS) for each furloughed employee who remains continuously employed until 31 January 2021. The bonus will provide additional support to retain employees.
To be eligible, employees will need to:
- earn at least £520 per month (above the Lower Earnings Limit) on average for November, December and January
- have been furloughed at any point and legitimately claimed for under the Coronavirus Job Retention Scheme
- have been continuously employed up until at least 31 January 2021.
Employers will be able to claim the bonus from February 2021 once accurate payroll Real Time Information (RTI) data to 31 January has been received. More information about this scheme will be available by 31 July and full guidance will be published in the autumn.
Self-employment Income Support Scheme
- The Self-employment Income Support Scheme (SEISS) will support self-employed individuals (including members of partnerships) who have lost income due to coronavirus (COVID-19).
- This scheme will allow self-employed individuals to claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.
- No need to apply, HMRC will contact eligible individuals by mid-May 2020 and invite them to apply online.
- Payments will be made by early June 2020.
- It is possible to claim for Universal Credit while waiting for the grant.
- Eligible if the 2018/19 tax return has been submitted and traded in 2019/20 and intends to continue trading in 2020/21.
- Average trading profits must not be more the £50,000 for the last three years.
- Details on how the grant will be calculated can be found here.
- More info can be found on the Government’s site by clicking here.
UPDATE 29 May 2020:
- Self-Employment Income Support Scheme will be extended – with those eligible able to claim a second and final grant capped at £6,570.
- Individuals can continue to apply for the first SEISS grant until 13 July.
- Applications for the second grant will open in August. Individuals will be able to claim a second taxable grant worth 70% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total. Further guidance on the second grant will be published on Friday 12 June
Statutory Sick Pay (SSP)
- This refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19.
- Employers with fewer than 250 employees will be eligible (number of people they employed as of 28 February 2020).
- Employees will not need to provide a GP fit note.
- The weekly rate is £95.85. If you’re an employer who pays more than the weekly rate, you can only claim up to the weekly rate paid.
- There is a calculator on the Government’s website to work out how much you can claim.
- Coronavirus-related Statutory Sick Pay can be claimed online here.
- Further details on the scheme can be found here.
- July’s Self Assessment payments on account may be deferred until January 2021. This is optional; if you are still able to pay you should do so.
- Available to anyone who’s self-employed
- No application required – simply skip July’s payment.
- This is not a grant. You’ll still need to pay the amount in full before January.
- VAT payments due 20 March 2020 to 30 June 2020 can be deferred until 31 March 2021 (continue to pay normally after the deferral period ends)
- Available to all VAT registered businesses.
- No application required – simply hold back VAT payment.
- This is not a grant. You’ll still need to pay the amount in full before 31 March 2021.
- The deferral does not cover payments for VAT MOSS or import VAT.
- Find out how to defer your payments here.
Business Interruption Loan
- A new temporary Business Interruption Loan Scheme supports SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years.
- Eligible businesses are UK based, with a turnover of no more than £45m that meet the British Business Bank eligibility criteria.
- Full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website.
- The scheme is open for applications at all major banks.
- To apply, you should talk to your bank or one of the 40 accredited finance providers (not the British Business Bank) as soon as possible.
Time To Pay Service
- All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.
- Every UK based business that pays tax to the UK Government and has outstanding tax liabilities are eligible.
- If you have missed a tax payment or you might miss your next payment due to COVID-19, call HMRC’s dedicated helpline: 0800 024 1222.
Bounce Back Loan Scheme
- The Bounce Back Loan scheme will help small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000.
- The government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months.
- Loan terms will be up to 6 years. No repayments will be due during the first 12 months and a low rate of interest for the remaining period of the loan.
- UK based businesses negatively affected by the coronavirus that was not already in difficulty in December 2019 are eligible.
- Not available for those that already applied for the Business Interruption Loan.
- There are 11 lenders participating in the scheme including many of the main retail banks. You should approach a suitable lender yourself via the lender’s website.
- Find a lender via this link.
- Most commercial insurance policies are unlikely to cover pandemics or unspecified notifiable diseases, such as COVID-19.
- However, those businesses which have an insurance policy that covers government ordered closure and pandemics or government ordered the closure and unspecified notifiable disease should be able to make a claim (subject to the terms and conditions of their policy).
- Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers.
If you have any questions please contact us on firstname.lastname@example.org or call 0800 917 9100. If you are a client, your accounts manager will be happy to answer any queries you may have.