On 29 May, the Chancellor announced a more flexible furlough scheme and an extension of the Self-Employed Income Support Scheme (SEISS).
Furlough scheme to become more ‘flexible’ from 1 July
From 1 July, furloughed employees will be able to return to work part-time; however, the value of Government support will gradually be tapered from August. This will continue until the eventual closure of the scheme in October.
- From 1 July – employers can bring back furloughed employees part-time. Additionally, they can claim a grant in respect of the time not worked that otherwise would be. Employers will have to pay employees at their usual rate of pay for any hours worked. Employers must also cover the cost of Employer National Insurance Contributions (NICs) and minimum employer automatic enrolment pension contributions that this pay attracts.
- From 1 August – CJRS grants will cease to cover employer NICs and pension contributions. The grant will continue to cover 80 per cent of furloughed employee’s usual wages, up to £2,500 a month.
- From 1 September – the grant will fall to 70 per cent of a furloughed employee’s usual wages, capped at £2,187.50 a month. Employers will be expected to contribute the remaining 10 per cent plus NICs and pension contributions to reach a combined total payment to the employee of 80 per cent of their usual wages, up to a cap of £2,500 a month.
- From 1 October – the Government’s contribution will fall to 60 per cent, capped at £1,875 a month. Employers will contribute 20 per cent of a furloughed employee’s usual wages plus NICs and pension contributions to reach 80 per cent, capped at £2,500 a month.
Scheme closes to new entrants from 30 June
The scheme will, in effect, close to new entrants from 30 June; from this point, employers can only furlough employees that they have previously furloughed for a full 3-week period prior to 30 June. Consequently, the last day for furloughing employees for the first time is Wednesday 10 June.
The Chancellor has confirmed the extension of the Self-Employment Income Support Scheme (SEISS).
In August, eligible self-employed individuals will be able to claim a second grant. The grant will be worth 70 per cent of three months’ average trading profits, capped at £6,570.
The deadline for claiming a grant under the first round of funding is 13 July. Individuals do not need to have claimed the first grant to be able to claim the second.
How can George Hay help?
Now, more than ever, it is essential that you continue to maintain accurate and timely accounting records. It is also important that you keep your tax affairs up to date. Doing so, means you can plan better and prepare better for when we come out the other side of this crisis.
In light of the 13 July deadline for making claims for the first SEISS grant, if you have not yet been contacted by HMRC or been given professional advice about your eligibility and you think you may be eligible for the support, contact our expert team today to discuss your circumstances in more detail.
Information correct at time of writing (01/06/2020). Please keep an eye on our dedicated Coronavirus page, and our Adapt, Rebuild & Recover Hub, for the very latest news and advice as we endeavour to cover the key issues affecting you and your business at this time. More information and advice is available on the Gov.uk website.