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The Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme are changing. In this blog post, we hope to help explain the latest updates to these Government schemes, so that you can make the right choice for you.
Coronavirus Job Retention Scheme (CJRS)
The final date that employers could furlough staff for the first time under the Coronavirus Job Retention Scheme was 10th June. As the minimum time period that an employee can be furloughed for is three weeks, this means that the scheme will close from 30th June. After this date, existing furlough may be renewed but the scheme will not accept new entrants.
From 1st July 2020, businesses will be able to bring furloughed employees back to work on a part-time basis. For the remainder of July, the Government will continue to pay 80% of wages for the hours they are not working (up to a cap of £2,500), plus employer National Insurance and pension contributions.
In August 2020, employers will be expected to start covering the costs of employer National Insurance and pension contributions but only for the hours that the employee is working. The Government will still continue to pay up to 80% towards wage costs.
In September 2020, this amount will be reduced to a maximum of 70% and be capped at £2,187.50. Employers will be expected to cover the employers NI and pension contributions, plus the 10% of employee wage costs to make it up to 80%.
During October 2020, the Government will only pay 60% of wages and the cap will be further reduced to £1,875. Employers will continue to cover the employers National Insurance and pension contributions and 20% of wages. The CJRS will then be closed down by 31st October 2020.
Self-Employment Income Support Scheme
The Self-Employment Income Support Scheme is for self-employed people to make a claim for a taxable grant, worth up to 80% of their average monthly trading profits. It is capped at £7,500 and the amount that entrants will receive is based on their previous earnings from the past three years.
You can check your eligibility for SEISS online - provided you have your Self Assesement Unique Taxpayer Reference (UTR) number and your National Insurance number to hand. If you want to claim for the existing period of March to June, you must do so on or before the deadline on 13th July 2020.
The scheme was originally supposed to end on 31st May but after several unions, support groups and press organisations contacted the Chancellor, asking for it to be extended, the SEISS will now be available until 31st August 2020.
It is important to note however that the grant available for this new three-month period will be reduced to 70% of the applicant's eligible earnings, and the maximum grant available for this period will be £6,570 which is less than the previous quarter.
Self-employed people can claim for this second grant even if they did not submit a claim for the first, but the eligibility criteria remains unchanged. To claim for this new period, you must prove that your business was 'adversely affected on or after 14th July 2020'. Applications for the second SEISS grant are not open yet but you can sign up for email alerts to be notified when they do open.
If you would like advice about either scheme or would like help applying for other forms of financial support, contact our team today and one of our expert accountants will be able to assist you further.