On the 29 May 2020, the Chancellor announced an extension to the Self-Employment Income Support Scheme (SEISS) and the Coronavirus Job Retention Scheme (CJRS).
Self-Employment Income Support Scheme (SEISS)
This is a taxable grant and will form part of your 2020/21 taxable business profits.
Eligibility criteria
Self-employed individuals, including members of partnerships, are eligible if they:
- submitted their Income Tax Self-Assessment tax return for the tax year 2018-19;
- continued to trade in 2019-20 and intend to keep trading in 2020-21;
- carry on a trade which has been adversely affected by COVID-19;
- have average self-employed trading profits of no more than £50,000 and at least equal to their non-trading income.
Individuals can continue to work, start a new trade or take on other employment including voluntary work.
First SEISS Grant –
- The grant covers the 3 months to the end of May 2020.
- Eligible individuals can claim a taxable grant worth 80 per cent of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profit, and capped at £7,500 in total.
- Applications for the first grant opened on 13 May 2020.
- Applications for the first grant will close on 13 July 2020. Accountants are not allowed to make the grant for you, but If you need any help with applying for the grant, please contact us.
Second and Final SEISS Grant –
- The second grant will cover the 3 months to the end of August 2020.
- Eligible individuals can claim a taxable grant worth 70 per cent of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profit, 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 when applying for the second and final grant.
- An individual does not need to have claimed the first grant in-order to be eligible for the second and final grant.
Applications will open in August 2020. Further information on the second grant will be available from 12 June 2020.
Coronavirus Job Retention Scheme (CJRS)
As part of getting back to normal working practices the Chancellor announced the details of part furloughing employees. Over the coming months employers will start to contribute to the furloughing of employees.
Employer costs:
From August 2020, the level of the grant will be slowly tapered to reflect that people will be returning to work:
- In June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance Contributions (ER NICS) and pension contributions for the hours the employee doesn’t work. Employers will have to pay employees for the hours they work. This is the same as it is now.
- In August, the government will pay 80% of wages up to a cap of £2,500 and employers will pay ER NICs and pension contributions for the hours the employee does not work.
- 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 and pension contributions and 10% of wages to make up 80% 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 and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.
As with the previous scheme, employers are still able to choose to top up employee wages to 100% at their own expense if they wish.
Flexible furloughing:
- From 1 July, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim CJRS grant for their normal hours not worked.
- From 1 July, employers will be able to agree any working arrangements with previously furloughed employees.
- When claiming the CJRS grant for furloughed hours; employers will need to report and claim for a minimum period of a week.
- This is a minimum period and those making claims for longer periods such as those on monthly or two weekly cycles will be able to do so.
- To be eligible for the grant, employers must agree with their employee any new flexible furloughing arrangement and confirm that agreement in writing.
Further guidance on flexible furloughing and how employers should calculate claims will be published on 12 June.
Closure to new entrants from July:
- The scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June.
- This means that the final date by which an employer can furlough an employee for the first time will be the 10 June, in order for the current three-week furlough period to be completed by 30 June. Employers will have until 31st July to make any claims in respect of the period to 30 June.
- From 1 July the scheme will only be available to employers that have previously used the scheme in respect of employees they have previously furloughed.
- Employers will be able to make their first claim under the new scheme from 1 July.
Summary of the above Job Retention Scheme changes –
|
|
June 2020 | July 2020 | August 2020 | Sept 2020 | October 2020 |
| Government contribution – Employer NICs and pension contributions |
Yes |
Yes |
No |
No |
No |
| Government contribution – Wages | 80% up to £2,500 | 80% up to £2,500 | 80% up to £2,500 | 70% up to £2,187.50 |
60% up to £1,875
|
| Employer contribution – Employer NICs and pension contributions |
No |
No |
Yes |
Yes |
Yes |
| Employer Contribution – Wages |
– |
– |
– |
10% up to £312.50 | 20% up to £625 |
| Employee receives | 80% up to £2,500 per month | 80% up to £2,500 per month | 80% up to £2,500 per month | 80% up to £2,500 per month |
80% up to £2,500 per month |