Coronavirus Job Retention Scheme Updated Guidance

On Friday 29th of May, the Chancellor announced details of future changes to the government’s coronavirus support schemes. The key details are outlined below:

Coronavirus Job Retention Scheme

The scheme will close to new entrants from 30‌‌ June.

After 30 June you will only be able to furlough employees that you have previously furloughed for a full three-week period prior to 30‌‌ June. This means that the final date that you can furlough an employee for the first time will be 10‌‌ June. This ensures that the employee will have completed a three-week furlough period by 30‌‌ June. Any claims in respect of the period to 30‌‌ June will have to be submitted by 31‌‌ July

From 1‌‌ July 2020, the government will introduce flexible furloughing. This will allow you to bring previously furloughed employees back to work part-time and means that employees can work as much or as little as your business needs, with no minimum time that you have to furlough staff for. Any working hours arrangement that you agree with your employee must cover at least one week and be confirmed to the employee in writing.

You can decide the hours and shift patterns that your employees will work on their return and you will be responsible for paying their wages in full while working. The government will then pay 80% of the employee’s wages for any of their normal hours they do not work up until the end of August.

The furlough claim will need to include data on the usual hours an employee would be expected to work in the claim period and the actual hours worked.

If your employees are unable to return to work, or you do not have work for them to do, they can remain on furlough and you can continue to claim for their full hours under the existing rules.

From August, the government grant provided through the job retention scheme will be slowly tapered.

  • in August, the government will continue to pay 80% of wages up to a cap of £2,500. Employers will pay Employer NICs and pension contributions.
  • in September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work. Employers will have to pay 10% of wages to make up 80% of the total up to a cap of £2,500. Employers will also have to pay Employer NICs and pension contributions
  • in October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work. Employers will have to pay 20% of wages to make up 80% of the total up to a cap of £2,500. Employers will also have to pay Employer NICs and pension contributions
  • the cap on the furlough grant will be proportional to the hours not worked.

If you are a smaller employer, some or all of your employer NIC bills will be covered by the Employment Allowance, so you should not be significantly impacted by that part of the tapering of the government contribution.

The Coronavirus SSP Rebate Scheme

Employers can now claim for employees who after 28 May 2020 are self-isolating because they have been notified by the NHS or public health bodies that they have come into contact with someone with coronavirus.

Self-Employment Income Support Scheme

The Chancellor also announced plans to extend the Self-Employment Income Support Scheme (SEISS) for those people whose trade continues to be, or is newly, adversely affected by COVID-19 (coronavirus). Eligible self-employed people will be able to claim a second and final SEISS grant in August; this will be 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 grant will still only be paid to those who commenced self employment before 6 April 2019, submitted their 2018/19 tax return before 23 April 2020 and  self employed income and other sources of income come within the same eligibility criteria as for the first grant. However, you can make a claim for the second grant even though you may not have made a claim for the first grant (if for example your business was not adversely affected by COVID-19 at the time of the first grant but has become affected more recently).  

Claims for the first grant, which opened on 13‌‌ May, must be made no later than 13‌‌ July. So if you think you may be eligible for the first grant then you should make a claim as soon as possible

We expect further details regarding the above announcements to be issued over the coming weeks. However, in the meantime we hope you will find the above useful but please do contact j.andrews@bprheaton.co.uk if you have any questions.

James Andrews

Tax Manager