Increased financial support for workers and businesses will be available as England goes into a second lockdown.
The government is extending the existing Coronavirus Job Support Scheme (CJRS) or ‘furlough’. Support continues from 1 November 2020 to December 2020. Consequently, implementation of the Job Support Scheme is delayed.
Level of support
The furlough scheme conditions will be similar to those applying in August 2020. Grants will cover 80% of employee wages up to £2,500 per month. Employers are responsible for paying the employer’s NIC and employer’s minimum workplace pension contributions. For the average claim this is 5% of total employment costs. Topping up furlough pay is at the employer’s discretion.
Employees did not have to use the CJRS previously to use CJRS Extended. Employers must pay their workers, report pay on a Real Time Information (RTI) and have submitted a return between 20 March and midnight on 30 October 2020 to use the scheme.
Importantly, employees qualify irrespective of their type of contract. So, workers on zero hours contracts do not miss out. Employers will agree new working arrangements with their workforces. We await further details on whether the scheme is open to contractors or directors.
If employees were on an employer’s payroll on 23 September 2020 (i.e. notified to HMRC on an RTI submission on or before 23 September) and were made redundant or stopped working for them afterwards, they can also qualify for the scheme if they re-employ them.
Flexible furlough is allowed during England’s new four-week lockdown. It means that staff can go back to work part-time to prepare for Brexit, for example. The rules are the same as those applicable since 1 July 2020. Workers can be put on furlough for a few days or hours per week. There appears to be no minimum time for furloughed or working hours. That said, each furlough claim must cover at least seven consecutive calendar days.
Which employers qualify?
Under the CJRS Extended all employers with a UK bank account, UK PAYE scheme and meet the qualifying conditions can claim. Similarly, charities and not-for-profit organisations can access grants for employees. However, the government does not expect public sector bodies and publicly funded organisations to use the scheme.
Once again, the claims process will resemble that applicable to date. Employers must report both the hours not worked in a claim period and the usual hours. We await clarification on some points. The government have advised you will be able to make your claim shortly before, during or running your payroll.
Help for the self-employed
The Chancellor has also announced additional support for the self-employed during the England lockdown. The next SEISS grant covers November, December and January and is capped at £5,160. It means that eligible workers can claim 80% of their profits for November. In addition, they can claim 40% for both December and January. As a result, the total grant increases from 40% to 55% of trading profits for the three-month period.
There will be a second grant covering February to April 2021, however the government has not yet released details of what the level of funding will be.
Who can claim?
Qualifying conditions for the third SEISS grant are unchanged. Anyone eligible for the previous SEISS grants, even if they didn’t apply, can claim. In a further boost, applications open on November 30 so the government will pay grants quicker.
Local business grants
Grants are available for businesses required by law to close. In England local authorities will pay grants based on the rateable value of the business premises:
- For properties with a rateable value of £15,000 or under, grants to be £1,334 per month, or £667 per two weeks
- For properties with a rateable value of between £15,000-£51,000 grants to be £2,000 per month, or £1,000 per two weeks
- For properties with a rateable value of £51,000 or over grants to be £3,000 per month, or £1,500 per two weeks
The Wales, Scotland and Northern Ireland administrations will set their own level of support.
Mortgage holidays update
Originally, the deadline for mortgage holiday applications was 31 October 2020. As part of the government’s lockdown support borrowers impacted by Covid-19 can still access this facility. Details on who qualifies will be announced soon.
There is further information about financial support during the four-week England lockdown at: https://www.gov.uk/government/news/furlough-scheme-extended-and-further-economic-support-announced
If you require help to claim CJRS, SEISS or business grants, call us on 01785 243276.