Covid 19 update for changes detailed on 5th November 2020
Extension of the coronavirus job retention scheme
After the Chancellor’s statement that the CJRS will be extended to 31 March 2021, HMRC have released a policy paper: “Extension of the Coronavirus Job Retention Scheme”
This policy paper applies for CJRS claims for the period starting on or after 1 November 2020 to 31 January 2021. Full guidance for the CJRS extension will be published on 10 November. The guidance for claim periods from February onwards will be published following the government’s review.
The CJRS (also known as the furlough scheme) will remain open until 31 March 2021. For claim periods running to January 2021, employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. The £2,500 cap is proportional to the hours not worked.
The government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.
Claims can be made by employers across the UK that meet the eligibility criteria.
This policy paper sets out updated details on:
- eligibility criteria for employers and employees
- what employers will need in order to claim
- updated information on reference data to calculate those claims
Employers who can claim under the CJRS extension
Employers do not need to have used the CJRS previously.
Employer across the UK can claim whether their businesses are open or closed
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 previous CJRS eligibility requirements also apply to these employers.
HMRC will publish details of employers who make claims under the extended CJRS scheme, starting from December. Full details will be included in full guidance which will be published on 10 November 2020.
We are working on the CJRS calculator although we need to wait until the 10 November when final details are released before we can finalise, check and release.
More information from the Government on yesterday’s announcement can be seen here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/932977/ECONOMIC_SUPPORT_FACTSHEET_5_November.pdf
Self-employment income support scheme grant extension (SEISS)
In yet another change of policy the Government has announced the SEISS grant extension in the form of 2 further grants, each available for 3-month periods covering November 2020 to January 2021 and February 2021 to April 2021.
To be eligible for the grant extension self-employed individuals, including members of partnerships, must:
- have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
- declare that they intend to continue to trade and either:
- are currently actively trading but are impacted by reduced demand due to coronavirus
- were previously trading but are temporarily unable to do so due to coronavirus
The extension will last for 6 months, from November 2020 to April 2021. Grants will be paid in 2 lump sum instalments each covering a 3-month period.
The third grant will cover a 3-month period from 1 November 2020 until 31 January 2021. The Government will provide a taxable grant calculated at 80% of 3 months average monthly trading profits, paid out in a single instalment and capped at £7,500 in total. This is an increase from the previously announced amount of 55%.
The Government are providing the same level of support for the self-employed as is being provided for employees through the Coronavirus Job Retention Scheme which has also been extended until March 2021.
The Government has already announced that there will be a fourth grant covering February 2021 to April 2021. They will set out further details, including the level, of the fourth grant in due course.
The grants are taxable income and also subject to National Insurance contributions.
We have updated the Excel SEISS calculator and we will continue to do so.
The latest details are in the Policy statement updated yesterday.