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The enduring economic impact of Covid-19 has prompted the Government to improve financial support for businesses and workers across the UK. The new measures aim to protect jobs during what looks set to be a difficult winter.

 

CJRS extended

The Coronavirus Job Retention Scheme (CJRS) is extended until the end of March 2021. It is available to businesses throughout the UK. The Government will review the policy in January 2021. Then, if the economic situation is improving sufficiently, employers may have to contribute more.

 

Who pays what?

Under current guidelines the Government will pay 80% of employees’ normal wages for hours not worked. This covers claim periods from 1 November 2020 to 31‌‌‌ January 2021. Support is capped at £2,500 per month. Employers pay National Insurance and employer pension contributions for hours not worked. For an average claim this accounts for 5% of total employment costs or £70 per employee per month.

 

Making a claim

To be accepted claims must be submitted to HM Revenue & Customs (HMRC) 14 calendar days after the end of the relevant month (or the next working day if it falls on a weekend). HMRC will want a verifiable reasonable excuse to process late claims.

 

From December 2020 HMRC will publish the names of employers making claims under the scheme for the month of December onwards. For companies and Limited Liability Partnerships (LLPs) HMRC will also publish the company registration number.

 

Eligibility

Employers which meet the eligibility criteria do not need to have claimed previously under CJRS to claim under the extended CJRS. Claims are valid for people employed and on the PAYE payroll on 30 October 2020. Employers must have made a PAYE Real Time Information (RTI) notification of earnings submission to HMRC between 20 March 2020 and 30 October 2020.

 

Re-employed workers

It is permissible to re-employ and claim for employees who were made redundant. To qualify workers must have been on the payroll on 23 September 2020. The employer must have made an RTI submission from 20 March 2020 to 23 September 2020.

 

Flexibility

Businesses can use the extended CJRS for employees for any amount of time and shift pattern. This includes furloughing employees full-time.

Job Retention Bonus

The new guidelines mean that the CJRS will be available in February 2021. Consequently, the Government will not pay the Job Retention Bonus. Following a review, it will implement an alternative retention incentive as appropriate.

More information

For further details go to GOV‌‌‌.UK and search ‘Extension to the Coronavirus Job Retention Scheme’.

 

SEISS extended

To help the self-employed the Chancellor is extending the Self-Employment Income Support Scheme (SEISS). It will now run for six months, until 30‌‌‌ April 2021. Overall, the level of support for the third grant increases from 55% to 80% of trading profits. This grant covers three-months from the beginning of November until the end of January.

 

Eligible workers can claim a taxable grant based on 80% of three months’ average profits. Paid as a single instalment, it is capped at £7,500. The window for applications opens on 30 November 2020.

A fourth grant, also paid as a lump sum, covers the period February to April 2021. The government will announce further details in due course.

You can check if you are eligible for the third grant from 23‌‌‌ November 2020. Details will be available on GOV‌‌‌.UK.

 

Businesses in England

The extended furlough scheme and enhanced SEISS grants are on top of

support already announced. Financial assistance for businesses in England includes:

 

  • cash grants of up to £3,000 per month for businesses forced to close
  • £1.1 billion for Local Authorities, distributed on the basis of £20 per head, to support businesses more broadly
  • extensions to existing government-backed loan schemes and the Future Fund to the end of January 2021
  • the ability to top-up Bounce Back Loans
  • back-dated cash grants of up to £2,100 per month for leisure/hospitality businesses in Tier 2/3 areas in England
  • an extension to mortgage payment holidays for homeowners
  • up to £500 million of funding for councils in England to support the local public health response

 

Devolved administrations

The Chancellor is also increasing the upfront guarantee of funding to the devolved administrations. Rising from £14 billion to £16 billion, it continues support for workers and businesses in Scotland, Wales and Northern Ireland. This improved package represents an increase of at least £8.2 billion of additional funding for the Scottish Government. There is £5.0 billion extra for the Welsh Government and £2.8 billion for the Northern Ireland Executive. This funding is in addition to their Spring Budget 2020 funding.

 

Further Information

To find out more search ‘help and support if your business is affected by coronavirus’ on GOV.UK. You can also book live webinars highlighting changes to CJRS and SEISS and how they affect you.

We’re working closely with clients to help them weather the Covid-19 storm. If you need advice, call us today on 01785 243276.

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