This update covers the following important announcements:
1) Proposed changes to the Coronavirus Job Retention Scheme
2) Extension of the Self Employment Income Support Scheme
3) Local Discretionary Grant Scheme
1. PROPOSED CHANGES TO THE CORONAVIRUS JOB RETENTION SCHEME
10th June – beware potential loss of ability to claim CJRS grants. All the information below is subject to further detailed guidance to be issued on 12th June 2020.
The Chancellor has now announced plans to reshape the CJRS from 1st July 2020.
From this date, furloughed employees can come back to work on a flexible part-time basis. Employers pay for the working hours, the balance comes under the furloughing scheme.
– In order to make a claim under the new scheme (CJRS Version 2, part-time working), employers must have submitted a claim under the original version of CJRS before 1st July 2020. Only employees who have been included in the original CJRS can be eligible under CJRS Version 2.
– IMPORTANT: The new rules on this currently indicate that the final date by which an employer can furlough an employee for the first time will be 10th June.
– This is because the minimum 3 week furlough period will need to be completed by 30th June.
For the month of July, the grant available will be calculated on the same basis as it is now (80%). However, the government have confirmed that they will reduce their contribution over the remaining months of the scheme – August to October.
The important dates and changes to the CJRS can be summarised as follows:
– 10th June 2020 – This is the final date by which an employer can furlough an employee for the first time. Whilst the guidance is currently limited, it would appear that you need to furlough an employee on or before this date, if you want to have a chance of making a furloughing claim going forward.
30th June 2020 – The original CJRS comes to an end. No new entrants are allowed. All claims in respect of the periods up to this date must be made by 31st July 2020.
1st July 2020 – The new CJRS Version 2 comes into place. The Government will continue to fund 80% of employee’s wages and associated N.I. and pension contributions. Furloughed employees can come back to work on a flexible part time basis with the employers covering the costs of the working hours of the part-furloughed staff.
1st August 2020 – Employers will no longer receive funding for furloughed employees N. I. or pension costs.
1st September 2020 – Employers will be required to contribute 10% of furloughed employee’s regular wages and the government will fund 70%. The employee should still receive 80% of their regular wages (or £2,500 if lower).
1st October – Employers will be required to contribute 20% of furloughed employee’s regular wages and the government will fund 60%. The employee should still receive 80% of their regular wages (or £2,500 if lower). Further guidance on flexible furloughing will be published by the government on 12th June.
2. EXTENSION OF THE SELF EMPLOYED INCOME SUPPORT SCHEME
The Chancellor has also announced that there will be a second and final grant available to those individuals eligible for the Self Employment Income Support Scheme (SEISS). Previously, eligible individuals were able to claim 80% of their ‘average earnings’ (based upon previous trading periods) to cover the 3 months to the end of May 2020, maximum £7,500. HMRC has confirmed that they will use the same eligibility criteria to establish self-employed individuals’ entitlement to a further SEISS grant.
This second grant will be reduced to 70% of ‘average earnings’ (based upon previous trading periods) to cover the 3 months to the end of August 2020. The maximum amount will be capped at £6,750 (down from £7,500).
Applications for the second grant will be open in August.
3. LOCAL DISCRETIONARY GRANT SCHEME
The Government has also announced the new Local Discretionary Grant Scheme (LDGS). The LDGS is an additional fund aimed at supporting those small businesses who were not eligible for the Small Business Grant Fund and which can demonstrate they have suffered a significant fall in income due to the COVID-19 crisis. All local authorities should have now received confirmation of the exact amounts available and it is anticipated that the first phase of claims will open this week.
Grants of up to £25,000 will be available.
Local councils have discretion about how to prioritise this funding but you’re potentially eligible if your business:
– is based in England
– has fewer than 50 employees
– has fixed buildings costs such as rent
– was trading on 11th March 2020
– has been adversely impacted by the coronavirus
Please contact your local council for more information on the specific claim criteria for your area. Afford Bond are committed to supporting all our clients. Directors and staff are available for discussions and we will help in any way we can. Email or call us on Nantwich 01270 623731 or Wilmslow 01625 416380.