Government Assistance Schemes Extended
Self Employed Income Support Scheme
The government have announced a second taxable grant for the self-employed.
The first round is currently open for claims but will close on 13th July 2020.
The second round will open in August.
- Reported Self-employed income on your 2019 personal tax return
- Submitted your 2019 personal tax return by 23/4/2020
- Business suffered due to Coronavirus
- Continued to be self-employed in 2019/2020 tax year
- Plan to still be self-employed in 2020/21 tax year, subject to effect of Coronavirus
You can check your eligibility by visiting https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme#eligible
- Based on average taxable profits reported on 2017, 2018 and 2019 tax returns
- If trading profits are less than £50,000
- If self-employment is your main source of income that year
Round 1 Grant
- A one-off payment of 80% of average earnings for 3 months
- Capped at £7,500
Round 2 Grant
- A one-off payment of 70% of average earnings for 3 months
- Capped at £6,570
Coronavirus Job Retention Scheme
The government have now announced the details of the new Furlough scheme (Coronavirus Job Retention Scheme) rules.
The scheme will close to new employees on 30th June i.e. unless an employee has commenced furlough before 10th June then they will no longer be eligible for furlough.
Claim for the period before 30th June will need to be made before 31st July.
The scheme will be made more flexible and the funding reduced over the subsequent four months, before being closed totally at the end of October.
- Employers can offer employees furlough instead of laying them off.
- Employee can choose to accept or reject the furlough offer
- Furlough has to be by written agreement, as a variation of employment
- All other employment rules remain – pensions, company cars, holiday pay etc
- Furlough must last for at least 3 weeks
- The Employee must not work for that employer during furlough (but can work for others – paid or voluntary)
- The employer can claim from HMRC 80% of furloughed workers usual wages, up to £2,500 per month, plus associated National Insurance and pension contributions
- The employee must be paid at least this level of wages – but the employer can top up.
New Rules – The Changes
- The Employee may be furloughed part time e.g. 3 days out of a usual 5
- Usual wages must be paid for hours worked
- The employee must be paid at least 80% of usual wages, up to £2,500 pm for time on furlough
- The employer can claim from HMRC a percentage of furloughed workers usual wages, for time on furlough
- In July the recovery percentage is the full 80%, up to £2,500pm, plus the associated National Insurance and pension
- In August the recovery percentage is just the full 80%, up to £2,500pm
- In September the recovery percentage is 70%, up to £2,190pm
- In October the recovery percentage is 60%, up to £1,875pm
- The scheme ceases 31st October 2020
More details of the changes are still to be published – specifically how the calculations will work.
Remember furlough is voluntary for both the employer and the employee.