-
announces Self-Employment
Income Support Scheme will be extended - with those eligible
able to claim a second and final grant capped at £6,570.
- Chancellor also outlines further details on the extension of
the Coronavirus Job Retention Scheme; including improved
flexibility to bring furloughed employees back part time in July
and a new taper requiring employers to contribute modestly to
furloughed salaries from August.
- Both schemes are UK wide.
The government’s Self-Employment Income Support Scheme will be
extended, giving more security to individuals whose livelihoods
are adversely affected by coronavirus in the coming months, the
Chancellor announced today (Friday 29 May 2020).
Those eligible under the Self-Employment Income Support Scheme
(SEISS), which has so far seen 2.3 million claims worth £6.8
billion will be able to claim a second and final grant in August.
The grant will be worth 70 per cent 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.
The Chancellor also set out more details on how the Coronavirus
Job Retention Scheme (CJRS) will continue to support jobs and
business as people return to work, following the announcement of
an extension of the scheme on 12 May.
So far, the CJRS has helped 1 million employers across the UK
furlough 8.4 million jobs, protecting people’s livelihoods.
From 1 July 2020, businesses will be given the flexibility to
bring furloughed employees back part time. This is a month
earlier than previously announced to help support people back to
work. Individual firms will decide the hours and shift patterns
their employees will work on their return, so that they can
decide on the best approach for them - and will be responsible
for paying their wages while in work.
From August 2020, the level of government grant provided through
the job retention scheme will be slowly tapered to reflect that
people will be returning to work. That means that for June and
July the Government will continue to pay 80% of people’s
salaries. In the following months, businesses will be asked to
contribute a modest share, but crucially individuals will
continue to receive that 80% of salary covering the time they are
unable to work.
The scheme updates mean that the following will apply for the
period people are furloughed:
- June and July: The government will pay 80% of wages up to a
cap of £2,500 as well as employer National Insurance (ER NICS)
and pension contributions. Employers are not required to pay
anything.
- August: The government will pay 80% of wages up to a cap of
£2,500. Employers will pay ER NICs and pension contributions
– for the average claim, this represents 5% of the gross
employment costs the employer would have incurred had the
employee not been furloughed.
- September: The government will pay 70% of wages up to a cap
of £2,190. Employers will pay ER NICs and pension contributions
and 10% of wages to make up 80% total up to a cap of £2,500. For
the average claim, this represents 14% of the gross employment
costs the employer would have incurred had the employee not been
furloughed.
- October: The government will pay 60% of wages up to a cap of
£1,875. Employers will pay ER NICs and pension contributions and
20% of wages to make up 80% total up to a cap of £2,500. For the
average claim, this represents 23% of the gross employment costs
the employer would have incurred had the employee not been
furloughed.
Chancellor said:
“Our top priority has always been to support people,
protect jobs and businesses through this crisis. The furlough and
self-employment schemes have been a lifeline for millions of
people and businesses.
“We stood behind Britain’s businesses and
workers as we came into this crisis and we stand behind them as
we come through the other side.
“Now, as we begin to re-open our country and
kickstart our economy, these schemes will adjust to ensure those
who are able to work can do so, while remaining amongst the most
generous in the world.”
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. Employees who believe they are not getting their
80% share can also report any concerns to the HMRC fraud hotline.
HMRC will not hesitate to take action against those found to be
abusing the scheme.
Notes to editors
NOTES TO EDS:
SEISS
- Individuals can continue to apply for the first SEISS grant
until 13 July. Under the first grant, eligible individuals can
claim a taxable grant worth 80% of their average monthly trading
profits, paid out in a single instalment covering three months’
worth of profits, and capped at £7,500 in total. Those eligible
have the money paid into their bank account within six working
days of completing a claim.
- Applications for the second grant will open in August.
Individuals will be able to claim a second taxable grant 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.
- The eligibility criteria are the same for both grants, and
individuals will need to confirm that their business has
been adversely affected by coronavirus. An individual does not
need to have claimed the first grant to receive the second grant:
for example, they may only have been adversely affected by
COVID-19 in this later phase. Further guidance on the second
grant will be published on Friday 12 June.
CJRS:
- Around 40% of employers have not made a claim for employer
NICs costs or employer pension contributions and so will be
unaffected by the change in August if their employee’s employment
patterns do not change
- Many smaller employers have some or all of their employer NIC
bills covered by the Employment Allowance so will not be
significantly impacted.
- Around 25% of CJRS monthly claims are below the thresholds
where employer NICs and automatic enrolment pension contributions
are due, and so no employer contribution would be expected for
these payments to furloughed employees in August.
- To enable the introduction of part time furloughing, and
support those already furloughed back to work, claims from July
onwards will be restricted to employers currently using the
scheme and previously furloughed employees. The scheme will close
to new entrants on 30 June, with the last three-week furloughs
before that point commencing on 10 June.
- From 1 July, employers will be able to agree any working
arrangements with previously furloughed employees.
- When claiming the CJRS grant for furloughed hours; employers
will need to report and claim for a minimum period of a week, for
grants to be calculated accurately across working patterns.
- The updated SEISS and CJRS schemes will continue to operate
UK-wide to the timings set out above.
- If an average claim lasted 8 months, the total cost of
employer contributions would represent around 5% of the gross
employment costs an employer would have incurred had the employee
not been furloughed.
