Important HMRC updates to coronavirus assistance schemes

The Government revealed several important updates to coronavirus support schemes on Friday. Here are the details.

Coronavirus Job Retention Scheme update

From 1 July 2020, businesses using the scheme will have the flexibility to bring previously furloughed employees back to work part time – with the government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced, to help people get back to work.

Revised guide to the Coronavirus Job Retention Scheme

Read our comprehensive Knowledge Hub guide to the changes to the scheme and how they need to be applied (members only)

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Employers will decide the hours and shift patterns their employees will work on their return, and will be responsible for paying their wages in full while working. This means that employees can work as much or as little as the business needs, with no minimum time that they can furlough staff for.

Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, they will need to report and claim for a minimum period of a week. They can choose to make claims for longer periods such as on monthly or two weekly cycles if preferred. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

If employees are unable to return to work, or employers do not have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules.
 
Employer contributions

From August the government grant provided through the job retention scheme will be slowly tapered.

  • In June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer national insurance (ER NICs) and pension contributions for the hours the employee doesn’t work. Employers will have to pay employees for the hours they work.
  • In August, the government will continue to pay 80% of wages up to a cap of £2,500, but employers will pay ER NICs and pension contributions. For the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed.
  • In September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work. Employers will pay ER NICs, pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
  • In October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work. Employers will pay ER NICs, pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.

The cap on the furlough grant will be proportional to the hours not worked.

Many smaller employers have some or all of their employer NIC bills covered by the Employment Allowance so will not be significantly impacted by that part of the tapering of the government contribution.

Around a quarter of CJRS monthly claims relate to wages that are below the threshold where employer NICs and auto-enrolment contributions are due, and so no employer contribution will be required for these furloughed employees in August.

Important dates

It’s important to note that the scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period before 30 June.

This means that the final date by which an employer can furlough an employee for the first time will be 10 June, for the current three-week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.

Self-Employment Income Support Scheme update

On Friday 29 May, the Chancellor announced an extension to the Self-Employment Income Support Scheme (SEISS) for those people whose trade continues to be, or is newly, adversely affected by COVID-19 (Coronavirus). Eligible self-employed people will be able to claim a second and final SEISS grant in August; this will be a taxable grant worth 70% of their average monthly trading profits for three months, paid out in a single instalment and capped at £6,570 in total.

The eligibility criteria for the second grant will be the same as for the first grant. People do not need to have claimed the first grant to claim the second grant: for example, their business may have been adversely affected by COVID-19 (Coronavirus) more recently. More information about the second SEISS grant will be available on 12 June.

Claims for the first SEISS grant, which opened on 13 May, must be made no later than 13 July. Eligible self-employed people must make a claim before that date to receive the first SEISS grant (a taxable grant of 80% of their average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total). So far, over 2.3 million people have claimed, with a total of £6.8 billion paid out to support people’s incomes and give us the best chance of recovering quickly as the economy reopens.

In the meantime, please help us reach those self-employed people who could benefit from a SEISS grant now, by encouraging anyone you think might be eligible for the first grant but hasn’t yet made a claim to do so ahead of 13 July. For more details please visit GOV.UK

Coronavirus Statutory Sick Pay Rebate Scheme launched

The UK Government’s Coronavirus Statutory Sick Pay Rebate Scheme is now live on GOV.UK.

If you’re an employer with fewer than 250 employees, you can now claim for Coronavirus-related Statutory Sick Pay (SSP). You can also speak to your tax agent about making claims on your behalf.

The repayment will cover up to two weeks of the applicable rate of SSP. Employers can claim for periods of sickness starting on or after:

  • 13 March 2020 – if an employee had COVID-19 (Coronavirus) or the symptoms or was self-isolating because someone they live with had symptoms
  • 16 April 2020 – if an employee was shielding because of COVID-19 (Coronavirus)

For more information on eligibility and how to make a claim please visit GOV.UK.

Time To Pay – updated guidance

All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. This support is available now, and arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

HMRC has set up a helpline to support businesses and self-employed people concerned about not being able to pay their tax due to COVID-19 (Coronavirus). Anyone who is running a business or is self-employed, and is concerned about paying their tax due to COVID-19 (Coronavirus), can call HMRC’s helpline for help and advice: 0800 024 1222.

More guidance is available on GOV.UK.

Updated webinars now available

To support businesses, our live webinars on a variety of COVID-19 (Coronavirus) related topics, including the Job Retention Scheme, Self-employed Income Scheme (SEISS) and Statutory Sick Pay Rebate Scheme (SSPR) have been updated.

You can book a place on any of our other webinars or watch a recording on HMRC’s YouTube channel

David Nunn is Content Manager at AAT.

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