(The Chancellor of the
Exchequer): Following my announcement last week, today I am
pleased to share more detail on the next steps for the
Coronavirus Job Retention Scheme (CJRS) and Self-Employment
Income Support Scheme (SEISS).
CJRS was launched to protect jobs and help employers through this
unprecedented crisis. By midnight on 31 May more than 8 million
jobs have been protected which would otherwise have been at risk.
More than 1 million firms have benefitted from this support.
I announced on Tuesday 12 May that the CJRS would be extended
until the end of October. This means the scheme will now be in
place for a full eight months, giving businesses the vital
support that they need during this unprecedented time. As we now
begin to re-open the economy, it is right that state support is
slowly reduced and the focus shifts to getting furloughed
employees back to work.
From 1 July, employers will have the flexibility to bring back
their furloughed employees for any amount of time and any shift
pattern, giving businesses more flexibility to respond to demand
as the economy reopens. Employers will be able to claim the
furlough grant for the proportion of the employees’ normal hours
they are not working. Employers must pay their employees for the
hours they are working, subject to their employment contract, and
will be required to report data on hours worked by an employee
and the usual hours an employee would be expected to work in a
claim period under the scheme for furloughed employees.
As a result, from Wednesday 1 July, there will be no minimum
furlough period; that is, no minimum amount of time that an
employee can be on temporary leave. However, any furlough
arrangement agreed between employer and employee and reported in
a claim to HMRC must still cover a period of at least one week.
To enable this change on 1 July, the CJRS will be closed to new
entrants on 30 June. This means employees furloughed for the
first time must be placed on furlough on or before Wednesday 10
June in order to access flexible furlough, in order for the three
week minimum period to have been completed by 30 June. All
employers planning to claim a grant from 1 July must have
completed their first claim (for the period ending 30 June) by
Friday 31 July.
In June and July, nothing will change for employers and the
government will continue to pay 80 per cent of people’s salaries.
From August, the level of the grant will be slowly reduced and
employers will be required to top up the government payment to
ensure employees receive 80 per cent of their normal pay, up to a
monthly cap of £2,500, throughout. In August, employers will be
asked to pay Employer NICs and pension contributions; in
September employers will also pay 10 per cent of wages to make up
80 per cent total, up to a cap of £2,500; in October, employers’
contribution will increase to Employer NICs and pension
contributions and 20 per cent of wages, up to a cap of £2,500.
An early assessment of CJRS claims suggest that around 40 per
cent 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 employment patterns do not change.
Detailed guidance on these changes will be published on Friday 12
June.
The SEISS opened on 13 May – days ahead of schedule – and
eligible individuals will still be able to apply for the first
grant until 13 July. By midnight on 31 May, 2.5 million
self-employed individuals had already applied for grants, worth
£7.2 billion in total.
The SEISS will be extended and eligible individuals could now
qualify for a second and final grant.
The extension of the SEISS now means eligible individuals whose
businesses are adversely affected by coronavirus will be able to
claim a second and final taxable grant when the scheme reopens
for applications in August. Individuals will be able to claim a
taxable grant worth 70 per cent of their average monthly trading
profits, paid out in another single instalment covering three
months’ worth of profits, and capped at £6,570 in total. This is
in line with changes to the CJRS as the economy reopens and the
eligibility criteria remain the same for this final grant.
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 coronavirus in this later phase.
Further guidance will be published on Friday 12 June.
