COVID-19 – CJRS and SEISS update and some key deadlines

As the country starts to cautiously emerge from lockdown, there have been some important announcements about the help available from the government and, in particular, some key dates to watch out for:

• The Coronavirus Job Retention Scheme (CJRS) closes for new entrants from 30 June 2020 and employees need to have been furloughed for a full 3 week period before that to remain eligible for the scheme, which means they have to have been furloughed by 10 June 2020; and
• Claims for the first grant under the Self-Employment Income Support Scheme (SEISS) need to be made by 13 July 2020.

We have summarised below the recent announcements.

Coronavirus Job Retention Scheme (CJRS)

There are three main changes to the CJRS:

1. Part time furloughing

From 1 July 2020, CJRS will be made more flexible to enable employers to bring previously furloughed employees back part time with the government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August.

Employers can decide the hours and shift patterns their employees will work on their return, and will be responsible for paying their wages in full for the time that they work. This means that employees can work as much or as little as the business needs, with no minimum time that a member of staff must be furloughed.

Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, the employer will need to report and claim for a minimum period of a week but can choose to make claims for longer periods if preferred. Employers will be required to submit details of the usual hours an employee would be expected to work in a claim period and the actual hours worked.

If employees are unable to return to work, or employers do not have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules.

2. Employer contributions

From 1 August 2020, employers will be required to start contributing to the wage costs of paying their furloughed staff, with the employer contribution gradually increasing in September and October.

From August, the government grant provided through the job retention scheme will be slowly tapered:

• In June and July, the government will pay 80% of wages up to a cap of £2,500 per employee per month as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work – employers will have to pay employees for the hours they work.
• In August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions.
• In September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500.
• In October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500.
• The cap on the furlough grant will be proportional to the hours not worked for those on part time furlough from 1 July 2020.

3. Deadline for entry into the CJRS

The scheme will close to new entrants from 30 June 2020. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June. This means that the final date by which an employer can furlough an employee for the first time will be 10 June for the three week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.

If you have questions on the CJRS or would like us to help with your claim, please let us know.

Self-Employment Income Support Scheme (SEISS)

The SEISS has been extended for those people whose trade continues to be, or is newly, adversely affected by COVID-19. Eligible self-employed people will be able to claim a second and final SEISS grant in August; this will be a taxable grant worth 70% of their average monthly trading profits for three months, paid out in a single instalment and capped at £6,570 in total.

The eligibility criteria for the second grant will be the same as for the first grant, however people do not need to have claimed the first grant to claim the second grant. For example, a business may not initially have been adversely affected by COVID-19 but may have been affected more recently, say if the proprietor has become unwell or due to supply issues.

Claims for the first SEISS grant, which opened on 13 May, must be made no later than 13 July 2020. Eligible self-employed people must make a claim before that date to receive the first SEISS grant (a taxable grant of 80% of their average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total). So far, over 2.3 million claims have been made worth £6.8 billion.

If you think you might be eligible for the first grant but haven’t yet made a claim then please let us know if we can help.