Briefing 8 – 1st June
We have not been in touch for a couple of weeks. We hope you are all well and staying safe. Please see below for information we hope you will find useful and that will assist in navigating your way through these turbulent times.
Extension to the Coronavirus Job Retention Scheme
More details have now been released concerning the extension to the Coronavirus Job Retention Scheme (CJRS). The Scheme has been extended from June to October, but requires employer support in its later months.
From 1 July 2020, employers will have the flexibility to bring previously furloughed employees back to work part-time – with the Government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced to help people get back to work.
Employers can decide the hours and shift patterns that the employees will work on their return, and will be responsible for paying their wages in full when working.
This means that employees can be asked to work as much or as little as the business needs, with no minimum time that an individual can be furloughed for.
Any working hours arrangement that is agreed with an employee must cover at least one week and be confirmed to the employee in writing.
When claiming the CJRS Grant for hours still furloughed, employers will need to report and claim for a minimum period of a week. Albeit you can choose to make claims for longer periods such as on monthly or two weekly cycles if you prefer.
For users of our Payroll Service we will not be able to action weekly CJRS Grant recoveries, simply due to the resources we have available. But we can meet two weekly recovery cycles if needed.
You will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.
If employees are unable to return to work, or the business does not have work for them to do, they can remain on furlough and you can continue to claim the Grant for their full hours under the existing rules, subject to the rule changes below that kick in from 1 August. At this point, an Employer contribution to the Furlough Scheme becomes obligatory.
From August, the Government Grant provided through the CJRS will be slowly tapered.
- in June and 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 for the hours the employee does not work – Employers will have to pay employees only for any hours they work
- in August, the Government will continue to pay 80% of wages up to a cap of £2,500 but Employers will have to pay the ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that would have been incurred if the employee had not been furloughed
- 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 pay ER NICs, pension contributions and the 10% of wages to make up 80% of the total up to a cap of £2,500
- 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 pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500
- the cap on the Furlough Grant will be proportional to the hours not worked.
Please remember, 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.
In the future – HMRC have the right to go back and review your records on Furlough and the claims made under the CJRS Scheme, so please be very sure to keep detailed records and diaries of the days in and out of work for each employee you choose to either Furlough or Flexibly Furlough. Ensuring that this aligns with all the corroboratory evidence of their job. Email traffic, Site logs, Tacographs etc etc. You have been warned……….
It is important to note that the Furlough Scheme will close to new entrants from 30 June. From this point onwards, you will only be able to furlough employees that you have 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 for the current three-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.
Again, for those using our Payroll Service, it is clear from the detail above that this will give our team more processing and calculating to do as your team members within a Payroll must be reviewed on a person by person basis. We are happy to undertake this work and ensure that you get the Furlough Funds you so need, on a timely basis. However, it does require endeavour on your part also please We are juggling our resources to meet your needs, so please help us by getting your monthly and weekly Payrolls to us as soon as you can.
Self-Employment Income Support Scheme – SEISS
· Individuals can continue to apply for the first SEISS grant until 13 July. Under the first Grant, eligible individuals can claim a taxable grant worth 80% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £7,500 in total. Those eligible have the money paid into their bank account within six working days of completing a claim.
Most of our clients progressed their claims as soon as they were able and have now received the money. Please let us know if you have not and need support. It was broadly as advised, albeit HMRC did alter the way they calculated the funds payable in their final draft of the legislation, which was a little annoying for some of you, who received a bit less than we originally thought.
The Government have now announced there will be a second Grant
· 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.
· The eligibility criteria are the same for both Grants, and individuals will need to confirm that their business has been adversely affected by coronavirus. An individual does not need to have claimed the first Grant to receive the second Grant; for example, they may only have been adversely affected by COVID-19 in this later phase. Further and more detailed guidance on the second Grant will be published on Friday 12 June
We detailed these Grants in earlier briefings. They are there to be claimed by businesses with property related costs that have not been able to secure assistance through either of the Rates related support offerings to date.
Dorset Council’s Fund went live at 1pm today. There is only a 2 week window for making a claim. Please visit the https://www.dorsetcouncil.gov.uk/home.aspx website to make your claim before 14 June 20. A link to make an application is currently on their home page.
Bournemouth and Poole Council’s Fund went live last Friday. This is the link to their claims process.
Statutory Sick Pay Rebate Scheme
If you are an employer with fewer than 250 employees, you can now make a claim for Coronavirus-related Statutory Sick Pay (SSP) paid to employees as the Scheme is now live.
You are eligible to use the Scheme if you meet all of the following criteria:
- You are claiming for an employee who is eligible for sick pay due to Coronavirus
- You had a PAYE Payroll Scheme in operation before 28 February 2020
- You had fewer than 250 employees across all PAYE schemes on 28 February 2020
- You are eligible to receive State aid under the EU Commission Temporary Framework – more information about this can be found on GOV.UK (please use the search term above).
The repayment will cover up to two weeks of the applicable rate of SSP, and is payable if a current or former employee was unable to work on or after 13 March 2020 and entitled to SSP, because they either:
- had or have Coronavirus
- could not or cannot work because they were/are self-isolating at home
- were/are shielding in line with Public Health guidance.
Mortgage Holiday Scheme extended to September
The Treasury has confirmed that the Mortgage Payment Holiday Scheme is set to be extended for a further three months. The Scheme had been due to end in June, after launching in March. The Treasury and Financial Conduct Authority said borrowers would either be able to continue to withhold payments until the end of September or start making reduced payments instead.
You need to make contact with your lender if you wish to request a further extension to your Mortgage Payment Holiday.
Coronavirus Future Fund
The Government have now issued details of The Future Fund. This will provide UK Government loans to UK based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors. The fund opened for applications on Wednesday 20 May 2020.
These convertible loans may be a suitable option for businesses that typically rely on equity investment and are unable to access other Government business support programmes, because they are either pre-revenue or pre-profit.
The Future Fund was developed by the UK Government and is being delivered by the British Business Bank.