Revised furlough scheme and self-employed package
The Government has developed new financial support package for businesses in response to the nationwide restrictions announced by the Prime minister on October 31, 2020 which are aimed to reduce spread of COVID-19.
In particular, Coronavirus Job Retention Scheme (CJRS) more known as furlough scheme is extended up to the end of March 2021 and will be available across the country. The five-month package will subsidise 80% of standard salaries of the eligible employees limited to £2,500 per month. It should be noted that the Government has also allowed to re-hire the employees who were redundant after September 23, 2020 and place them on furlough. In details, employees are eligible if they were:
- employed and on PAYE payroll on October 30, 2020.
- employed and on PAYE payroll on September 23, 2020 but then were redundant
Generally, the scheme will run similarly with the previous CJRS and employers can make claims starting with November 11, 2020. The deadline for the claims for November is December 14, 2020 with the claims for each following month by 14th of the next month. Also, employers should submit HMRC information about the employee’s earnings from March 20, 2020 to October 30, 2020 for those who were on payroll on October 30, 2020 and from March 20, 2020 to September 23, 2020 for those who were re-hired. More important, businesses are not required to make any contributions to employees’ salaries – they are only required to cover National Insurance and Employer pension payments for hours not worked. However, as the Chancellor states, the policy will be revised in January 2021 to ask employers for additional contributions if the economy will reveal any signs of an improvement. The full guidance of the new policy is planned to be published on November 10, 2020.
In addition to the employment financial support, the Government has also extended Self-Employment Income Support Scheme (SEISS) for self-employed individuals who are unable to continue their business because of the pandemic. The scheme presumes providing grants up to 80% of the trading profits from November to January based on the three-month average trading profits limited to £7,500. Unlikely the first two grants, the third SEISS grant increased the support to 80% from previous 40% of the trading profits. The self-employed individuals will be able to apply for the grant beginning with November 30, 2020. As further steps for supporting the self-employed business, the Government has already advertised the fourth grant February-April 2021 with the details presented later.
Posted on Nov 05, 2020.
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