Coronavirus: CJRS (furlough) and self-employed income support scheme update
Posted on 2nd June 2020
Since 20th April 2020, over 8.4 million jobs have been furloughed in the UK, at a cost of about £14 billion a month. The Coronavirus Job Retention Scheme (CJRS) was introduced by Chancellor Rishi Sunak with the aim of preventing mass redundancies as government-imposed lockdown caused by the coronavirus pandemic brought economic hardship for many sectors and industries whose businesses were forced to close.
Sunak has now confirmed three major changes to the furlough scheme
1. From 1st July 2020, the CJRS will be given some flexibility to enable employers to bring previously furloughed employees back part time, and still receive a grant for the time that they are not working. The government will continue to pay 80% of wages for any of the normal hours that part-time employees do not work. This means employees can come back part-timeThis flexibility has come one month earlier than previously announced to help people get back to work in a gradual manner as the country starts to reopen and its economy restarts.
2. From 1st August 2020, employers will have to start contributing to the wage costs of paying their furloughed staff in the form of employer national insurance and pension contributions. The contributions that employers will be required to pay will gradually increase in September (firms will have to pay 10% of their furloughed staff's wages) and October (this contribution will increase to 20%).
3. The scheme will close to new entrants from 30th June 2020. This means that the final date by which an employer can furlough an employee for the very first time will be 10th June 2020. Employers will have until 31st July 2020 to make any claims in respect of the period to 30 June.
Employer Contributions
June/July: The Government will continue to pay 80% of wages (up to £2,500 per employee) and Employer's NI and Employers Pension Contributions.
August: The Government will continue to pay 80% of wages (up to £2,500 per employee) but the employer will need to pay the Employer's NI and Employers Pension Contributions.
September: The Government will pay 70% of wages (up to £2,500 per employee) but the employer will need to pay the Employer's NI and Employers Pension Contributions. The employer will need to top-up wages to 80% (up to £2,500 per employee).
October: The Government will pay 60% of wages (up to £2,500 per employee) but the employer will need to pay the Employer's NI and Employers Pension Contributions. The employer will need to top-up wages to 80% (up to £2,500 per employee).
The self-employment income support scheme has also been extended
Sunak also announced that the self-employment income support scheme (SEISS) would be extended until August 2020 for those self-employed people whose business is adversely affected by coronavirus. Those eligible can claim a second and final SEISS grant in August, and this will be a taxable grant worth 70% of their average monthly trading profits for three months. It will be capped at £6,570 in total. The eligibility criteria for the second grant will be the same as for the first grant.
The government has said that more information about the second SEISS grant will be available on the gov.uk website on 12th June 2020.
Next steps, how to claim and full details
You can read the full details of the government's announcement here.
If you are a client, and you are claiming or want to claim under the CJRS/furlough scheme, I make these claims at the end of each month at no extra cost to you. If you have claimed for March, April or May, you will automatically be added to my list to contact for June. I will email you in the third week of June to confirm your furlough dates. Please respond to this email promptly to avoid any delays with your claim. If you haven't yet claimed and want to, please contact me by Friday 5th June. This is vital if you want a claim submitted.
Written by
Nicola J Sorrell -
Effective Accounting
Founder | Xero Champion | IR35 Expert
Tagged as: Coronavirus
Share this post:
