Based on updated government announcements on 5 November 2020
- Coronavirus Job Retention Scheme (CJRS)
- Self Employed Income Support Scheme (SEISS)
- Business Support Loans – based updated government announcements on 5 November 2020
Coronavirus Job Retention Scheme (CJRS)
Earlier this week, the Government had announced that the CJRS will be extended to at least 2 December 2020. Yesterday, the Chancellor announced that the CJRS will be extended to the end of March 2021.
The Government’s updated policy paper representing the detailed guidance relating to the extension can be found here: https://www.gov.uk/government/publications/extension-to-the-coronavirus-job-retention-scheme/extension-of-the-coronavirus-job-retention-scheme
The main points are:
HMRC will publish details of employers who make claims under the extended CJRS scheme, starting from December 2020;
- Employers can claim under the CJRS whether their business is open or closed;
- The scheme will provide a grant towards the cost of wages of 80% of eligible employees’ salaries for usual hours not worked, capped at £2,500 per employee, per month;
- Employers will have to cover the costs of employer national insurance and pension contributions. The Government will review the policy in January to decide whether to ask employers to contribute more;
- Employers employees do not have to have previously used the CJRS to benefit from the CJRS extension;
- To be eligible, employees need to have been on an employer’s PAYE payroll with an ‘Real Time Information’ (RTI) submission notifying payment to that employee to HMRC between 20 March 2020 – 30 October 2020;
- Employees that have been made redundant after 23 September 2020, can be reemployed and eligible for a CJRS claim – albeit seek employment law/HR advice here given the legal implications of such an arrangement;
- So-called ‘flexible furloughing’ (i.e. part-time furloughing – so that employees can work some of their usual hours) will continue to be available to employers, as well as completely furloughing employees (i.e. full-time furloughing);
For employees that have been previously furloughed, the previous calculations for calculating pay and usual hours must be used. For employees that have not been previously furloughed, new calculations for reference pay and usual hours must be used – the difference being the date range used;
- Employees can be furloughed where they are unable to work because they “are ‘shielding’ in line with public health guidance (or need to stay at home with someone who is shielding)” or “have caring responsibilities resulting from coronavirus, including employees that need to look after children”;
- The extended CJRS will represent a new scheme with claims for November 2020 able to be made from 11 November 2020, and must be made by 14 December 2020. Claims for each month should be submitted by 14th of the following month;
- As before, during employees’ hours that are recorded as being on furlough, the employee cannot do any work for their employer that makes money or provides services to their employer (or an associated entity), although they can: take part in training; volunteer or work for another employer/organisation;
Further guidance on the extended CJRS is expected to be released 10 November 2020.
Job Support Scheme (JSS)
The Government had already announced that the JSS would be postponed until the end of the extended JRS. The above extension to the CJRS means that the JSS will be further delayed – if it comes in at all.
Job Retention Bonus – Scrapped
As part of the announcements yesterday, the Chancellor announced that the Job Retention Bonus was being scrapped. This appears to be a direct consequence of the CJRS extension.
Broadly, the bonus was £1,000 that was going to be paid to employers for bringing previously furloughed employees back to work (that had been subject to a previous eligible claim under the CJRS), and retaining those employees until January 2021.
This scrappage of the scheme will need to be factored in by employers that were anticipating the receipt.
It is anticipated that another scheme focused on incentivising staff retention will be considered and implemented at a later date.
Self-Employment Income Support Scheme (SEISS)
The SEISS is also being extended.
A significant number of changes have now been made to the 3rd and 4th SEISS grants, and therefore it is useful to set out below the current position.
An extension to the SEISS was announced in September – this in the form of two grants, one for each of the 3 month periods ending 31 January 2021, and 30 April 2021.
As with the previous SEISS grants, these grants will be paid in lump sum instalments.
Under the original announcement in September, the 3rd SEISS grant (for the 3 month period to 31 January 2021) was to be “covering 20 per cent of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £1,875 in total.”
The extension announced earlier this week increased this to:
- 80% of average monthly trading profits for November 2020; and
- 40% of average monthly trading profits for December 2020 and January 2021.
- This effectively increased the level of this 3rd SEIS grant to 55% of average monthly trading profits.
Yesterday’s announcements sees this further amended and increased so that all three months cover 80% of average monthly trading profits. The guidance states:
“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.”
The Government’s policy paper covering this recent extension can be found here: https://www.gov.uk/government/publications/self-employment-income-support-scheme-grant-extension/self-employment-income-support-scheme-grant-extension
As before, the guidance states that:
The 4th grant will cover a three-month period from 1 February 2021 until 30 April 2021, and that the Government will review the level of the second grant and set this in due course;
Eligibility for these grants is linked to eligibility for the previous SEISS grants: and
Claims can be made for the 3rd grant from 30 November 2020, and the Government will, provide more guidance on the claims process in due course.
Business Support Loans
The Coronavirus Business Interruption Loan Scheme (CBILS) was previously set to end on 30 November 2020. This has been extended to 31 January 2021.
The Bounce Back Loan application deadline has also been extended to 31 January 2021, and additionally, the facility to ‘top-up’ borrowing to the £50,000 limit has been introduced for those that have not previously borrowed the full amount under the scheme.
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