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As businesses deal with the impact of yet another national lockdown in England, the Chancellor has taken further steps to protect jobs, businesses and the self-employed by announcing additional changes to the Government’s financial support measures.
Speaking in Parliament, Rishi Sunak announced further changes to the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme (SEISS) to help provide some certainty to businesses and workers over the winter period.
To help highlight what these changes may mean for you and your business, we have summarised them below.
The Government only confirmed that the CJRS would be extended to 2 December at the end of October in response to the new lockdown restrictions, but it has already taken the unprecedented step of extending it further until the end of March for all parts of the UK.
As before, eligible employees will receive 80 per cent of their usual salary for hours not worked, up to a maximum of £2,500 per month.
Businesses will also continue to have the flexibility to use the scheme for employees for any amount of time and shift pattern, including furloughing them full-time if required.
Employers will only be required to contribute for any hours worked and pay National Insurance and employer pension contributions for hours not worked.
The extended CJRS will operate along the same lines as the previous scheme and businesses will be able to claim either shortly before, during or after running payroll.
Claims for November can be made from 8am Wednesday 11 November but must be submitted to HMRC by no later than 14 December 2020.
The Government has said that claims relating to each subsequent month should be submitted by day 14 of the following month. This will ensure prompt payment following the end of the month.
Importantly, neither the employer nor the employee needs to have previously claimed or have been claimed for under CJRS to claim the extended CJRS, as long as other eligibility criteria are met.
Employers are permitted to claim for any for employees who were employed and on their PAYE payroll on 30 October 2020.
This means the employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
The Government has also confirmed that employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working afterwards can be re-employed and claimed for.
However, the employer must have made an RTI submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.
The Chancellor said that the extended CJRS would be reviewed in January, at which point the contributions made by the employer to the scheme may be adjusted.
Further details on how to claim are currently available by clicking here and full guidance on the new extended scheme will be published by the Government on Tuesday 10 November 2020.
In a similar vein to the CJRS extension, the Government will take further steps to help the self-employed by increasing the contribution under the SEISS from 55 per cent to 80 per cent over the next three months.
This is the second time that the third round of SEISS grant funding has been increased after the scheme itself was extended for a further six months.
Under the latest change, those eligible for the SEISS grant will be able to claim 80 per cent of three months’ average trading profits, paid out in a single instalment, which will be capped at £7,500.
HM Revenue & Customs (HMRC) has announced it will pay this more generous grant sooner than expected and “in good time for Christmas”. This is thanks to an earlier change, which brings the application period forward by two weeks so that people can submit their claim for the grant from 30 November.
The Government has already announced that there will be a fourth SEISS grant covering February to April. The Government will set out further details, including the level, of the fourth grant in due course.
The Government will not pay the Job Retention Bonus (JRB) in February as planned and has instead said that it will “redeploy a retention incentive at the appropriate time”.
The JRB was originally intended to encourage employers to keep people in work until the end of January. However, with the CJRS now extended until March, the Chancellor said the goals of this policy no longer apply.
To help businesses make sense of the latest financial measures the Government has produced a detailed factsheet, which can be downloaded by clicking here.
If you require support with any of the schemes recently announced or outlined in this update, please contact us.