COVID-19 – Updates to CJRS and SEISS

Tuesday, 2^nd June 2020

Further enhancements have been announced to the existing HMRC grant packages that will help employers and self-employed individuals still struggling due to the Coronavirus.

KEY POINTS

• CJRS – Furloughed employees able to work part time
• CJRS – Employers to start contributing to wage costs
• CJRS – Scheme closed to new applicants from 30^th June 2020
• CJRS – Scheme will be gradually tapered

• SEISS – A 2^nd and final grant payment payable in August
• SEISS – Taxable grant worth 70% of average monthly earnings*
• SEISS – Open to new applicants, further details to follow
• SEISS – First grant must be claimed by 13^th July 2020

*capped to maximum of £6,570

Have you claimed yet?

Why not? The schemes will close soon, and you could be eligible for a sizeable grant to help you and your business during these unprecedented times. Contact us now to find out how much you could be entitled to.

Coronavirus Job Retention Scheme – KEY POINTS in detail

The changes to the job retention scheme are as follows:

1. Part Time Furloughing

From 1^st ‌July 2020, employers will be able to bring previously furloughed employees back part time and still receive a grant for the time when they are not working.

The government will continue to pay 80% of wages for any of their normal hours they do not work up until the end of August. After this date, the contributions will decrease.

Employers will decide hours of work and shift patterns and will be responsible for the full pay of the hours worked.

There is no minimum time that an employer can furlough their staff for.

Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing.

CJRS claim must cover a minimum of one week and can cover longer periods if preferred.

Employers will need to submit the usual hours worked along with actual hours worked for each employee when claiming the grant.

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

2. Employer Contributions

From 1‌‌^st August 2020, employers will have to start contributing to the wage costs of paying their furloughed staff and this employer contribution will gradually increase in September and October.

• 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 doesn’t work – employers will have to pay employees for the hours they work
• in August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that they would have 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 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.

3. Important Dates

The scheme will close to new entrants from 30^th ‌‌June 2020.

After this date employers will only be able to use the scheme for employees who had previously been furloughed.

Employers have until 10^th June 2020 to furlough an employee not already registered on the furlough scheme and they must remain furloughed for the full 3-week period until 30^th June 2020.

Any claim for CJRS relating to the period up to 30^th June 2020 must be made by 31^st July 2020.

4. Closing the CJRS scheme

The scheme will remain open until 31^st October 2020. The likelihood of the government extending it beyond this date is very small.

Many smaller employers have some or all of their ER NIC bills covered by the Employment Allowance, therefore the numbers affected by the tapered government contributions are hoped to be minimal.

HMRC have advised that approximately a quarter of the CJRS claims made to date relate to wages that fall below the threshold for ER NIC and auto enrolment.

As the economy slowly returns to what is the new normal, the need and reliance for this scheme should gradually diminish.

Guidance and support

If you need any assistance with the furlough scheme, then contact us now. The deadline for making new claims is fast approaching and we would not want you to miss out.

Not sure what it is all about – read our previous article here.

At Onyx, our dedicated payroll department are on hand to offer full support to all our clients. This includes the complex calculations needed to report and submit the CJRS claims particularly with the new enhancement of extra flexibility on part time working hours.

 Self-Employment Income Support Scheme – KEY POINTS in detail

1. A Second Grant

Self-employed individuals whose trade has been affected by COVID-19 will be eligible for a second grant.

This is a final grant payment and will be payable in August.

2. Taxable grant worth 70%

The final grant payment will be taxable just as the first payment was.

It will be worth 70% of average monthly trading profits for a three-month period.

This grant will be capped at £6,570.

3. Who can claim?

Eligibility for this grant will be the same as the first one. Read our previous article for further details.

It is also open to those that did not claim the first grant, however, have now been adversely affected by COVID-19.

Further details will be made available on 12^th June 2020.

4. Important Dates

Anyone who is eligible to claim the first grant, but has not yet done it, must do so by 13^th July 2020.

Individuals must make the claim themselves; an agent cannot do it for you.

Guidance and support

We cannot make the claim for you, however we can talk you through the process and provide you with an estimate of how much you should be entitled to.

If you think that you may be eligible to make a claim for the first grant but are not sure what to do then contact us now.

There is still time to check if you qualify and you can get an instant response by using HMRC’s eligibility checker.

GET IN TOUCH WITH ONYX

Unsure of how much grant you may be entitled to or need help with your payroll or completing your accounts?

Contact us now or e-mail us at  enquiries@onyxaccountants.co.uk for a FREE no obligation consultation.

Got any questions or queries? Our friendly team of tax specialists are happy to help. Just drop us a line! Call us on 0121 753 5522 or 01902 759 800.

Keep up to date with the latest announcements by visiting our dedicated page https://onyx.accountants/covid/