6 June 2020

Furlough and new SEISS update

Furlough scheme

As most people will be aware the Coronavirus Job Retention Scheme is changing and detailed guidance is to be published on 12th June. In order to avoid confusion I had intended circulating when that is available. However the scheme will close to new entrants from 30 June this means the final date by which an employer needs to place an employee on furlough is 10 June. This because only employees who have previously been furloughed for a full 3 week period prior to 30 June can be included in the scheme.

The new scheme information available pending the new guidance on 12th June:

From 1 July 2020, businesses will be given the flexibility to bring furloughed employees back part time. Businesses and their employees will agree the hours to be worked and the employer will be responsible for paying their wages while in work, while still being able to claim the Coronavirus Job Retention Scheme grant for their normal hours not worked. The grant for furloughed hours will need to claim for a minimum period of a week (this statement is taken from the guidance, hopefully its implication will be clarified in the later guidance)

From August 2020, the level of government grant provided will be slowly tapered:-
June and July will continue at 80% as now.
August: 80% of salary only but excluding Employers NI and pension contributions which the employer pays (if due, for Director only companies there will not be any), on average this represents 5% of the gross employment cost.
September: 70% of wages (cap of £2,187.50) also excluding Employers NI and pension. So the employer pays 10% of wages plus the NI and pension).
October: 60% of wages (cap of £1,875). So the Employer will pay ER NI and pension and 20% of wages.

Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

Self-employed scheme (SEISS)

For the Self-employed (NB not operating through a limited company) the Self-Employment Income Support Scheme (SEISS) will be able to claim a second and final grant in August. The grant will be worth 70% of their average monthly trading profits, paid out in a single instalment covering three months' worth of profits, and capped at £6,570 in total.

Please note
You will need to confirm the business has been adversely affected by coronavirus.
You do not need to have claimed the first grant to receive the second grant.
You should not claim the second grant if your business has not been adversely affected since June.