A week is certainly a long time in any realm of life in 2020. Less than 24 hours after the full guidance on the new Job Support Scheme (JSS) was issued, we heard the announcement of a full national (England) lockdown from 5 November, an extension to the Coronavirus Job Retention Scheme (CJRS) and the postponement of the JSS until December at the earliest.
Whilst the Tier 2 and 3 restrictions affected a substantial number of businesses, this even more stringent national lockdown will impact across a much wider range of organisations and so the extension of the CJRS and the extended availability of other grants is welcome news.
Read on for more details on:
Extended CJRS – key points
Scheduled to end on 31 October 2020, the CJRS has now been extended for at least another month and is reverting back to the level of support which was available in August – i.e. employers will be able to claim back 80% of eligible employees’ gross wages for hours not worked, but employer’s NI and pension contributions will not be grant-funded.
From 1 November 2020, all employees can be furloughed, as long as the employees in question were included on a payroll run completed before midnight on 30 October. This means that employees who might previously have been ineligible for the scheme can now be furloughed.
Employees can be fully or flexibly furloughed – there is no minimum number of hours that an employee must work to qualify – although there is a minimum furlough period of 7 days for any employee where full furlough is being applied.
The government will provide 80% towards employees’ gross wages (for hours not worked) up to a maximum of £2,500 per month. This amount must be paid to employees. There is no requirement to ‘top-up’ an employee’s wage to 100%, but employers can do so if they wish. Employers are responsible for all Employer’s National Insurance Contributions and Employer’s Pension contributions, and these amounts cannot be reclaimed.
For flexibly furloughed employees, the CJRS grant will cover the proportion of hours the employee is not working in comparison to their usual working hours, with employers required to pay for the cost of the time staff are working according to the particulars of the employment contract.
We’re still waiting for the full guidance and legislation to be published, so there are some detailed questions which remain unanswered including what the reference date will be for establishing ‘normal wages’ or ‘usual hours’ on which the grant will be calculated. In addition, there’s been no announcement yet as to when the first claim can be made under this extended scheme.
If you had already put in place written agreements with employees under the Job Support Scheme, then you will need to withdraw or postpone these and ensure that suitable written agreements are in place covering the extended CJRS arrangements.
Further information is available from HMRC – and we expect that full guidance will be available soon.
Get in touch with your usual Sagars team member if you have any queries or contact our payroll manager, Andrew Senior.
Grants and other financial support
Businesses required to close in England due to local or national restrictions will be eligible for:
|Rateable value of premises||Grants|
|£15k or under||£1,334 per month or £66 per two weeks|
|Between £15k-£51k||£2,000 per month or £1,000 per two weeks|
|£51k||£3,000 per month or £1,500 per two weeks|
The administration of business grants (including determining which businesses will be eligible) is devolved to Local Authorities, so make sure you keep up to date with the announcements for your area and contact them directly to apply.
As yet, there’s no real clarity about the overlap with grants previously announced for businesses under Tier 2 or 3 restrictions (particularly as, for example, West Yorkshire is now remaining in Tier 2 until the lockdown begins even though it was scheduled to enter Tier 3 from today). Whilst the expectation is that, under the new national lockdown, additional support will be available to businesses which aren’t directly required to close but which are nevertheless impacted by the lockdown restrictions, the extent of or eligibility for this support hasn’t been confirmed.
Continuation of existing business support and payment deferral schemes
As announced in September, businesses who deferred VAT due from 20 March to 30 June 2020 now have the option, instead of paying in full by the end of March 2021, to make smaller payments up to the end of March 2022 interest-free. This will be an ‘opt-in’ scheme with more information available in the coming months.
Existing business rates holidays for retail, hospitality, leisure and nursery businesses are in place for the 2020-2021 tax year.
Employers with fewer than 250 employees can claim back up to 2 weeks of statutory sick pay (SSP) for employees who are eligible for sick pay due to coronavirus.
Subject to any changes which may possibly arise due to the current extension of the CJRS, the Job Retention Bonus will be available to claim from 15 February 2021 and is a £1,000 one-off taxable payment to employers for each eligible employee who was furloughed and kept continuously employed until 31 January 2021.
Both the Bounce Back loan scheme and the Coronavirus Business Interruption Loan Scheme remain open and the deadline for new applications has now been extended to 31 January 2021.
Your usual Sagars team member can help you with any queries or you can get in touch with either Paul Lodder or Alistair Walshaw.
Support for the self-employed
There were no initial announcements connected with the new national lockdown changing the support specifically available for self-employed individuals. There was, however, an update to say that the online service for the extended Self-Employed Income Support Scheme (SEIS) Grant (which covers the period from November 2020 to April 2021) will be available from 14 December 2020. However, speaking in the House of Commons this afternoon (02/11/20), the Prime Minister announced a doubling of support during November with the SEISS grant now due to payout at a rate of 80% of trading profits (rather than 40%) for this month.
Please get in touch with your usual Sagars team member for help with your queries or contact Helen Furniss.