Whilst detailed guidance has yet to be published, the Government’s policy paper has outlined how the scheme will operate. It will open on 1 November 2020 and run for 6 months, until April 2021. Claims can be made from December 2020 and will be paid on a monthly basis in arrears – that is after the employee has been paid and HMRC notified through the Real Time Information (RTI) submission.
Employees will be paid in full by their employer for time worked but, for hours not worked, the cost will be split between the employer, the Government (through wage support) and the employee (through a wage reduction).
The Government will pay a third of hours not worked up to a cap of £697.92 a month. The grant will not include Class 1 employer NICs or pension contributions and these will remain payable by the employer.
The employer will also contribute a third – the Government’s expectation is that employers cannot top up their employees’ wages above the two-thirds level.
Where the cap does not apply, this will mean that employees receive at least 77% of their normal wages.
Hours Employee Worked 33% 40% 50% 60% 70%
Hours Employee Not Working 67% 60% 50% 40% 30%
Employee Earnings (% of normal) 78% 80% 83% 87% 90%
Gov’t Grant (% of normal wages) 22% 20% 17% 13% 10%
Employer Cost (% normal wages) 55% 60% 67% 73% 80%
The only condition for small and medium enterprises is that the employer has a UK bank account and UK PAYE scheme.
Large businesses will need to show turnover has fallen following COVID-19. The Government expects that large employers using the Scheme will not make capital distributions, such as dividend payments or share buybacks (further details of this will be included in the future guidance).
The scheme is available irrespective of claims made under the Coronavirus Job Retention Scheme and has no impact on eligibility for the Job Retention Bonus.
To be included in the scheme, an employee must:
Be on an employer’s PAYE payroll on or before 23 September 2020 – that is a Real Time Information (RTI) submission notifying payment to that employee must have been made on or before this date.
Work at least a third of their normal hours for the first three months of the scheme operating. This threshold may increase after this point.
Employees can move in and out of the scheme and do not have to work a consistent pattern. However, each period must cover a minimum of seven days.
The scheme will use “usual wages” calculations similar to the Coronavirus Job Retention Scheme. Where staff have previously been furloughed, the calculation of usual pay and/or hours will be based on their underlying contracts, not the amounts whilst on furlough.
Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.
In line with the other support schemes, HMRC will carry out checks and may withhold or require repayment of claims made fraudulently or based on incorrect information.
The extension will be limited to those currently eligible for the SEISS (although they do not have to have claimed previously) who are actively continuing to trade but are facing reduced demand due to COVID-19.
There will be two grants in the period November 2020 to April 2021. The first will cover the period 1 November 2020 to 31 January 2021 and will provide a taxable grant covering 20 per cent of average monthly trading profits, capped at £1,875 in total, paid out in a single instalment.
The second grant will cover a three-month period from the start of February until the end of April. The Government will review the level of the second grant and set this in due course.
The grants are subject to Income Tax and National Insurance Contributions.
Full details of how to claim will be provided by HMRC in due course.
The repayment period of Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loans will be extended from six to 10 years with interest-only periods of up to six months and payment holidays will be available. The application date for all coronavirus loan schemes has been extended to 30 November.
Businesses who deferred their VAT bills will be able to spread repayment over 11 smaller interest-free payments up to March 2022. It will be necessary for businesses to opt into this scheme. The reduced VAT rate for the tourism and hospitality sectors will be extended to the end of March 2021.
The Government has provided further details on the option to defer income tax due in January 2021.
Have no outstanding tax returns;
Owe between £32 and £30,000; and
Have no other tax debts or HMRC payment plans set up
Can apply online for, and will automatically be granted, a payment plan. This must be done no later than 60 days from the due date of the tax. Payments must be made by monthly direct debits over 12 months and interest will be charged from 1 February 2021.
For amounts in excess of £30,000 or when a period longer than 12 months is requested, HMRC will need to be contacted directly.
Government guidance has been updated to confirm that, from 26 August 2020, employers can claim for employees who have been notified by the NHS to self-isolate before surgery for up to 14 days.
The Government has provided additional guidance. This is a one-off payment to employers of £1,000 for each eligible employee kept continuously employed until 31 January 2021.
The money is for the employer and does not need to be paid to the employee. The bonus is taxable unless it relates to staff that are not employed as part of a business (such as nannies or other domestic staff). Claims can be made between 15 February and 31 March 2021.
In order to claim, an employer must:
Have furloughed staff; and
Made an eligible Coronavirus Job Retention Scheme (CJRS) claim
Claims can be made for each employee:
For whom an eligible CJRS claim was made;
Was continuously employed from the end of their last furlough to 31 January 2021;
Not serving contractual or statutory notice period at 31 January 2021 (including notice of retirement);
Who has been paid at least £1,560 (gross) between 6 November 2020 and 5 February 2021; and
Received taxable earnings (of any amount) in each of the tax months:
6 November to 5 December 2020
6 December 2020 to 5 January 2021
6 January to 5 February 2021
The last 2 requirements will be checked to Full Payment Submissions via Real Time Information (RTI) for these months which must be submitted before the claim is made.
Claims can be made for staff utilising the Job Support Scheme and for staff for whom CJRS claims were made following a transfer under TUPE or due to a change in ownership. Claims cannot be made for staff transferred following their last CJRS claim.
In addition, claims can be made for individuals who are not employees provided a CJRS claim was made for the individual and the other criteria are met.
Measures in the Corporate Insolvency and Governance Act which were to expire on 30 September have been extended:
AGMs can continue to be held virtually until 30 December.
The restriction on Statutory demands and winding-up petitions will continue until 31 December.
Ceasing supply to or requiring additional payments from a company undergoing a rescue process will continue to be prohibited. However, small suppliers remain exempt until 30 March 2021.
The entry requirements for entering the moratorium procedure will continue to be relaxed until 30 March 2021.