I hope everyone is keeping safe and well. An update is included below of the various provisions and business support measures in place or coming into place. We are now, at a point where there are overarching central schemes in place. However, in addition, we do have measures that become specific to each business based on the type of business, its location, and in particular the provisions which apply within a specific area.
The Governments dilemma therefore continues in trying to manage the virus, keep the economy moving, support businesses, whilst also being conscious of the mounting debt position as a result of the support measures provided. I expect this to be a struggle for the Government to balance these elements for some time to come.
For many businesses, the difficulty continues to be the inability to predict changes which may affect them which are outside of their control. For businesses still being affected by this, it is key to continue to review and understand the support measures and provisions available, and in particular review the “what if” scenarios within budgets for the business as a way of attempting to manage a potentially regularly changing scenario. As always, please get in touch with us for support in reviewing and understanding your position.
Below is a summary of the main provisions in place. As always please get in touch with your relationship team should you need any further information or advice on these areas.
JOB SUPPORT SCHEME EXPANDED TO FIRMS REQUIRED TO CLOSE DUE TO COVID RESTRICTIONS
The government’s Job Support Scheme (JSS) will be expanded to protect jobs and support businesses required to close their doors as a result of coronavirus restrictions, the Chancellor announced 9 October.
Under the expansion, firms whose premises are legally required to shut for some period over winter as part of local or national restrictions will receive grants to pay the wages of staff who cannot work The Government’s aim is to protect jobs and enable businesses to reopen quickly once restrictions are lifted.
The government will support eligible businesses by paying two thirds of each employees’ salary (or 67%), up to a maximum of £2,100 a month.
Under the scheme, employers will not be required to contribute towards wages and only asked to cover NICS and pension contributions, a very small proportion of overall employment costs. It is estimated that around half of potential claims are likely not to incur employer NICs or auto-enrolment pension contributions and so face no employer contribution.
Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days.
The scheme will begin on 1 November and will be available for six months, with a review point in January. In line with the rest of the JSS, payments to businesses will be made in arrears, via a HMRC claims service that will be available from early December. Employees of firms that have been legally closed in the period before 1 November are eligible for the CJRS.
The scheme is UK wide and the UK Government will work with the devolved administrations to ensure the scheme operates across all four nations.
In addition to expansion of the JSS, the government is increasing the cash grants to businesses in England shut in local lockdowns to support with fixed costs. These grants will be linked to rateable values, with up to £3,000 per month payable every two weeks, compared to the up to £1,500 every three weeks which was available previously. This could benefit hundreds of thousands of businesses, including restaurants, pubs, nightclubs, bowling alleys and many more.
Job Retention Bonus – guidance now live
Guidance for the Job Retention Bonus is now available. It includes information about how you can check if your employees are eligible and when you can claim the bonus.
Businesses will be able to claim a one-off payment of £1,000 for every eligible employee furloughed and claimed for through the Coronavirus Job Retention Scheme (CJRS) and kept continuously employed until at least 31 January 2021. You do not have to pay this money to your employee.
To be eligible, employees must earn at least £1,560 between 6 November 2020 and 5 February 2021 and have received earnings in the November, December and January tax months. Employees must also not be serving a contractual or statutory notice period for you on 31 January 2021.
You will be able to claim the bonus from 15 February until 31 March once you have submitted PAYE information for the period up to 5 February 2021. HMRC will let you know how you can make a claim when further guidance is published by the end of January.
You can still claim the Job Retention Bonus if you make a claim for the same employees through the Job Support Scheme, as long as you meet the eligibility criteria for both.
Further information can be found on GOV.UK by searching ‘Job Retention Bonus Guidance’.
What you need to do now
If you intend to claim the Job Retention Bonus, you must:
- keep your PAYE submissions up-to-date and on time, with Real Time Information (RTI) reporting for all employees, including reporting the leaving date for any employees that stop working for you in the month they leave or the next Full Payment Submission
- use the irregular payment pattern indicator in RTI for any employees not paid regularly
- provide any employee data for past CJRS claims that HMRC has requested
- make sure all your CJRS claims have been accurately submitted and you have told HMRC about any changes needed (for example if you have received too much or too little).
Coronavirus Job Retention Scheme – changes from 1 October
From 1 October, HMRC will pay 60% of usual wages up to a cap of £1,875 per month for the hours furloughed employees do not work.
Employers will continue to pay furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. You will need to fund the difference between this and the CJRS grant yourself.
The caps are proportional to the hours not worked. For example, if your employee is furloughed for half their usual hours in October, you are entitled to claim 60% of their usual wages for the hours they do not work, up to £937.50 (half of £1,875 cap). You must still pay your employee at least 80% of their usual wages for the hours they don’t work, so for someone only working half their usual hours you’d need to pay them up to £1,250 (half of £2,500 cap), funding the remaining portion yourself. For help with calculations, search ‘Calculate how much you can claim using the Coronavirus Job Retention Scheme’ on GOV.UK.
You will also continue to pay furloughed employees’ National Insurance and pension contributions from your own funds.
The scheme closes on 31 October and you will need to make any final claims on or before 30 November. You will not be able to submit or add to any claims after 30 November.
VAT Deferral New Payment Scheme
If you deferred VAT payments that were due between 20 March and 30 June 2020, then these payments need to be made to HMRC by 31 March 2021. You can use the VAT Deferral New Payment Scheme to spread these payments over equal instalments up to 31 March 2022. Alternatively, you can make payments as normal by 31 March 2021, or make Time to Pay arrangement with HMRC if you need more tailored support.
More information on the VAT Deferral New Payment Scheme will be available on GOV.UK in the coming months.
FIND A KICKSTART GATEWAY TO APPLY FOR A KICKSTART SCHEME GRANT ON YOUR BEHALF
The Kickstart Scheme provides funding to employers to create job placements for 16 to 24-year olds on Universal Credit who are at risk of long-term unemployment.
Employers of all sizes can apply for funding which covers:
- 100% of the National Minimum Wage (or the National Living Wage depending on the age of the participant) for 25 hours per week for a total of 6 months
- associated employer National Insurance contributions
- employer minimum automatic enrolment contributions
Employers can spread the start date of the job placements up until the end of December 2021.
A Kickstart Scheme application must be for a minimum of 30 job placements. If a single employer cannot provide this many job placements, they can find an existing Kickstart gateway, such as a local authority, charity or trade body for help applying.
Further funding is available for training and support so that young people on the scheme can get a job in the future.
The Department for work & Pensions have announced new entries of organisations who can help employers with the Kickstart scheme across all regions of the UK So you can find a Kickstart gateway in England, Scotland or Wales who have expressed interest in helping employers get a Kickstart Scheme grant.