Jobs Support Scheme – Open
This scheme will take over from the job retention (furlough) scheme which finishes on 31st October – it also supersedes the original Job Support Scheme announced last month in the Winter Statement.
- SME business – simplistically having fewer than 250 employees.
- Larger businesses could qualify if turnover has dropped during Covid.
- Any registered charity with more than 250 employees is eligible.
- The employee must work at least 20% (down from 33%) of their normal hours.
- The employee must be on the payroll on or before 23rd September 2020. But to prove this an RTI submission must have been made by 23rd September. So for monthly paid employees who started in September will not qualify if the payroll hadn’t been run by the 23rd.
- The employer DOESN’T have had to previously claimed under the furlough scheme.
- The employee must not be on notice or at risk of redundancy.
- How it works:
- The employee is paid as normal for all the hours worked.
- Of the balance of the usual pay due:
- 61.67% is paid HMRC.
- 5% is paid by the employer.
- 33.33% is effectively unpaid.
- This means that the employee will get at least 73% (down from 77%) of their usual pay.
- The government are paying up to 49% (up from 22%) of the employee’s wage up to a maximum of £1,542 pm.
- Claiming the grant will be the same as the furlough i.e. by month.
- Will continue until 30th April 2021.
Employers must agree the new short time working arrangements with their employees and amend their contracts as necessary.
HMRC can review the contract on request and their intention is to inform the employees of the details of the claim.
Jobs Support Scheme – Closed
This scheme will is relevant where a business is legally obliged to close – we are currently short on detail which apparently will be updated before end of October.
- Eligibility – as above with JSS-Open but also:
- One or more premises are legally required to close.
- Closure includes where delivery and collection only is allowed or where restricted to provision of food/drink outdoors.
- Employee has been instructed not to work for at least 7 days.
- The full eligibility criteria have yet to be announced – we will inform once they have been.
- Government will provide 2/3rds of usual wage for the employee up to £2,083 pm (prorated).
- Employee will be eligible to claim Universal Credit subject to usual financial criteria.
Self Employed Income Support Scheme – Updated
This has been enhanced in terms of amount of grant.
- First grant will be paid at the beginning of November for 3 months to 31st January 2021.
- Second grant will be paid at the beginning of February for 3 months to 30th April 2021
- Covers 40% (up from 20%) of average monthly profits.
- Maximum grant will be £3,750 per quarter(up from £1,875) for the first grant. Second grant maximum still to be announced later.
- Eligibility as before (see recap below) but if you haven’t claimed previously you can claim for these 2 quarters.
- As with all government grants these will be taxable.
- HMRC will provide full details by mid-November.
To recap eligibility:
Who can claim?
- You can claim if you’re a self-employed individual or a member of a partnership and you:
- have submitted your Self-Assessment tax return for the tax year 2018 to 2019
- traded in the tax year 2019 to 2020
- are trading when you apply, or would be except for coronavirus
- intend to continue to trade in the tax year 2020 to 2021
- have lost trading profits due to coronavirus
- Your trading profits must also be no more than £50,000 and more than half of your total income for either:
- the tax year 2018 to 2019
- the average of the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019
What will you get?
- You’ll get a taxable grant based on your average trading profit over the 3 tax years:
- 2016 to 2017
- 2017 to 2018
- 2018 to 2019
- If you have been self-employed for less than 3 years, then the average will be taken over the period you have been trading.
Tax Relief for employees working from home
- If you as an employer have asked your employees to work from home because of COVID-19 and you have not reimbursed them, the employee is entitled to tax relief.
- The employee can go to https://www.gov.uk/tax-relief-for-employees/working-at-home and claim a flat rate tax relief on their addition costs.
- The relief will be given as a tax rebate through their tax coding, i.e. they will pay less tax on their salaries.
Coronavirus Self Isolation Regulations 2020
Employers are now responsible for ensuring employees self-isolate when they should. Otherwise there could be a £1,000 fine. From HR specialists 360hr 28-10-20.pdf
Recap on other initiatives
Bounce Back and CBILS Loan Schemes
These two schemes- the application period has been extended to 30th November 2020 (NOT 31st December as we previously reported).
To recap the basics:
Bounce Back loans
- Businesses will be able to borrow between £2,000 and £50,000.
Coronavirus Business Interruption loans (CBILS)
- Aimed at small and medium businesses.
- Borrow up to £5m.
Job Retention Bonus
This measure was announced in the summer and is still hanging on in there – to recap:
- £1,000 bonus given to companies who:
- Have furloughed an employee AND
- That employee is still working for the employer on 31st January 2021 AND
- The employee earns at least the lower earnings NI threshold (£520pm) in the period 1st November 2020 to 31st January 2021.
- The bonus will go to the employer. It will be taxable like any normal income.
- If the employee was not on furlough (Job Retention Scheme) but is on the new Job Support Schemes then currently they do NOT qualify for this bonus.
- Any business who took advantage of the payment deferral for the March, April and May 2020 VAT returns were due to pay that VAT on 31st March 2021.
- The 2020 VAT deferred can now be paid over 11 payments ending by 31st March 2022.
Income tax deferral
- Many tax payers deferred their July 2020 payment on account, until 31 January 2021. As these tax payers will need to pay the deferred amount, plus any balancing payment and first 2020/21 payment on account, by 31 January 2021, their January tax bill may be larger than usual.
- Any tax payer who are unable to make these payments in full by January 2021 can set up a Time to Pay payment plan of up to 12 months online without needing to phone HMRC.
- Those with self-assessment debts over £30,000, or who need longer than 12 months to repay their debt in full, will still be able to set up a Time to Pay arrangement but they will need to contact HMRC to set it up.