• Carrie Stokes

New Furlough Scheme and Additional Self Employed Grant

In his speech on Friday the Chancellor announced updates to the Corona Virus Job Retention Scheme (CJRS) and the Self Employed Income Support Scheme (SEISS). The full detail is not available until 12th June however the key changes are as follows:

Self Employed Income Support Scheme

The portal for the first grant is open claims do need to be made by 13th July 2020.

A second much welcomed grant will be awarded in August 2020, this grant will be 70% of average earnings capped at £6,500.

When applying for the grant it is worth noting that:

  1. It is only intended for businesses that are adversely affected by COVID19

  2. The business intends to trade in 2019/20.

Full details will be available on or before 12th June 2020.

Corona virus Job Retention Scheme (JRS)

The current scheme will continue until 30th June 2020 the key points being:

· Employers can agree with employees that they are furloughed

· Employees need to be furloughed for a minimum of 8 weeks

· HMRC will cover 80% of the gross salary, pension and employer pension contributions

Full details of the current scheme can be found here.

There are two main changes to the scheme:

  1. Flexible working arrangements from 1st July 2020

  2. Reduction in the proportion of government funding

Flexible working arrangements

From 1st July workers can be brought back into work on a part time basis, with employers being able to decide the hours or shift pattern for employees on their return.

The furlough claim will be based on an employee’s normal hours. For example, if an employee works 20 hours normally but returns to work for 10. 10 hours will be claimed under the furlough rules and 10 hours will be paid as normal salary.

The scheme will close to new entrants on 30th June 2020, to qualify for the scheme at this date employees must have been furloughed for 3 weeks, so any employees that an employer wants to put on this scheme must be placed on furlough by 10th June.

The final legislation will not be available before this 10th June deadline.

Key points for employers

Part of the reporting will include ‘normal’ hours so this information will need to be collated in advance of any furlough claim.

The decision about which staff to put into the scheme needs to be made by 10th June 2020 as these staff need to be furloughed for at least 3 weeks.

It is really important to revisit your plans to 31st October 2020, key questions to ask are:

· What does the cash flow forecast look like?

· Is work likely to fall off?

· What orders have you got?

· What does the sales forecast look like?

· When are you planning on returning?

· What staffing requirement do you need and when?

· Which staff need reduced hours?

For businesses with staff that have already returned to work the decision making process is going to be a lot more difficult than those that are looking at a gradual phased return.

Reduction in the proportion of government funding

From 1st August the proportion of support from HMRC will be reducing as follows:

The scheme is set to cease in November

Key Points for employers

The main points are to revisit your cash flow forecast and make sure that you have available funds to cover the additional compulsory costs. If not, then what actions need to be taken and when.

Summary of other Help and support

Bounce back loans

There are a number of considerations with regards to taking a bounce back loan you can find full details on in our blog post

HMRC Payment Deferral

VAT and the self assessment July payment on account have automatically been deferred. Time to pay arrangements can be put in place for PAYE and Corporation Tax.

Please note if you are deferring VAT and payment is taken by direct debit this needs to be cancelled, or HMRC will automatically take payment.

Discretionary Grants

Discretionary Grants are now live on local council pages, these are for businesses with premises that did not qualify for the Business Support Grant. Full eligibility criteria can be found on the relevant websites.

The window for applications is tight so please keep monitoring the pages, initial rounds have closed but there are due be secondary rounds announced.

Shropshire council's first round closes on 7th June.

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