HMRC updates

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HMRC updates

HMRC updates to support incomes during a second lock-down

2 Nov 2020
aat comment

Chancellor Rishi Sunak has announced a raft of changes to Government assistance schemes ahead of a second national lockdown in November.

Coronavirus Job Retention Scheme

The Coronavirus Job Retention Scheme has been extended by a month until December. As a result, the Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends. This is now expected to be in March.

CJRS extension details:

  • The extended Job Retention Scheme will operate as the previous scheme did, with businesses being paid upfront to cover wages costs. There will be a short period when we need to change the legal terms of the scheme and update the system and businesses will be paid in arrears for that period.
  • The CJRS is being extended until the end of March. It will be reviewed in January. The level of the grant will mirror levels available under the CJRS in August, so the Government will pay 80% of wages up to a cap of £2,500 and employers will pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work.
  • It will be open to new employers and employees.
  • As under the current CJRS, flexible furloughing will be allowed in addition to full-time furloughing.
  • Further details, including how to claim this extended support through an updated claims service, will be provided shortly.
  • The Job Support Scheme will be introduced following the end of the CJRS.
  • Anyone was made redundant after 23 September – when the furlough replacement was announced – can be brought back on to the scheme.

Who is eligible?

Employers

  • All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.
  • The Government expects that publicly funded organisations will not use the scheme, as has already been the case for CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted. All other eligibility requirements apply to these employers.

Resources

Guide: Extension to the Coronavirus Job Retention Scheme

The Government has decided to extend the furlough scheme on original terms, explained in this guide.

Templates: furlough letters for employees

Template letters are available in the coronavirus hub to cover full, flexible and extension of furlough situations.

Employees

  • To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.
    *As under the current CJRS rules:
  • Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees.
  • Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Such calculations will broadly follow the same methodology as currently under the CJRS.
  • When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days.
  • Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
  • For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.

What support is being provided and employer costs:

  • For hours not worked by the employee, the Government will pay 80% of wages up to a cap of £2,500. The grant must be paid to the employee in full.
  • Employers will pay employer NICs and pension contributions, and should continue to pay the employee for hours worked in the normal way.
  • As with the current CJRS, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
  • The Government will confirm shortly when claims can first be made in respect of employee wage costs during November, but there will be no gap in eligibility for support between the previously announced end-date of CJRS and this extension.

Mortgage Holidays

Mortgage payment holidays will no longer end today. Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.

The FCA will announce further information.

Business Grants

Further business grants were announced on 31 October 2020.

Businesses required to close in England due to local or national restrictions will be eligible for the following:

  • For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;
  • For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;
  • For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.

Self-employment Income Support Scheme

The Government has announced an extension for the Self-employment Income Support Scheme (SEISS).

The generosity of the Self-Employment Income Support Scheme (SEISS) Grant Extension will be increased from 40% of average trading profits to 80% of average profits – up to £7,500.

In addition, the opening of the service has been brought forward from 14 December to 30 November.

Further details in AAT Knowledge Hub

David Nunn is a former Content Manager at AAT.

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