Further extension of the furlough scheme
Following the previous one-month extension of the Coronavirus Job Retention Scheme (CJRS), Rishi Sunak announced the scheme is to be further extended. Greater detail is available in the policy paper, but the headlines are:
- The scheme will run until the end of March, taking us very close to the end of the tax year.
- The scheme extension is in two parts. Support in the first part, up to 31 January 2021, is pledged at 80% of a furloughed employee’s earnings, capped at £2,500 per month, proportionate to normal hours not worked. The level of support for the period from 1 February 2021 will be announced later.
- Employers will be responsible for paying for Employers’ National Insurance (NI) contributions and pension contributions.
- As with the later stages of the CJRS up to 31 October, employers are able to furlough employees flexibly on reaching appropriate agreement with their employees.
- It is acceptable to back date furlough agreements to 1 November 2020, but the relevant contract changes need to be issued by 13 November 2020.
- For employees who were previously eligible for CJRS, the reference pay and usual hours calculations are as they have been for the scheme as it ran to the end of October.
- Employees who were not previously furloughed, who are now furloughed, can be claimed for as long as they either:
- had earnings for 2019/20 reported on a PAYE return to HMRC from 20 March 2020 to 19 April 2020, or
- had earnings for 2020/21 reported on a PAYE return to HMRC from 6 April 2020 to 30 October 2020.
- Employees who were on an employer’s payroll as at 23 September 2020 but left that employment subsequently, whether by redundancy or for other reasons, can be re-employed, furloughed and will qualify for a CJRS claim.
- Directors who had their annual payment for 2019/20 reported to HMRC after 19 March 2020 will now be included in the scheme, having been previously excluded. Earnings reported in March, or in any other month until 30 October, can be claimed for up to the £2,500 cap.
- Claims for CJRS are needed by 14th of the following month. For example, support up to 30 November has to be claimed by the 14 December. As with previous versions of CJRS, it will be possible, from the 11 November, to claim up to 14 days in advance of the payday.
- More guidance is due to be issued by the government on 10 November and we will update our guidance for any other changes.
Deferral of the Job Support Scheme and the Job Retention Bonus
The Job Support Scheme, which was due to start on 1 November 2020, has been postponed due to the extension of the CJRS. The Job Retention Bonus will also be withdrawn for the time being, although Rishi Sunak announced it will be replaced with a new “retention incentive” that would be deployed at an “appropriate time”.
Further extension of the Self-Employed Income Support Scheme
The Self-Employed Income Support Scheme (SEISS) has been extended to mirror increases in the CJRS. The third phase of the SEISS will cover the period from 1 November 2020 to 31 January 2021, with support being increased to 80% of average earnings, capped at £7,500 for the three month period.
Claimants for the support must:
- Have been eligible for the first two phases of the SEISS, although no claim has to have been made, and
- Make a declaration that they:
- intend to continue to trade and due to coronavirus either:
- trade is reduced, or
- trade has temporarily ceased.
Claims will be available from 30 November 2020 and further details on how to claim will be made nearer that time. As previously, the grant will be taxable and subject to NI contributions.
A decision about the level at which the fourth phase of the grant will be available will be made in due course, but it should be noted that this potentially extends a month beyond the end of the latest extension to CJRS support.
Application deadlines extended for loan funding schemes
Application deadlines for the various loan and funding schemes listed below have been extended until 31 January 2021.
- Bounce Back Loan Scheme
- Coronavirus Business Interruption Loan Scheme
- Coronavirus Large Business Interruption Loan Scheme
- Future Fund
- Covid Corporate Financing Facility
Extension of Local Authority grants
Grants administered by Local Authorities, announced when local restrictions were in place, have also been extended. Businesses forced to close or curtail trading due to the lockdown will be eligible for grants, dependent upon the rateable value of the premises occupied, on a similar basis to the support provided during the first lockdown.
We are also here to support you
We will continue to provide you with updates in response to all new government announcements related to financial support over the coming weeks, but please know that you can contact us at any time.