Chancellor confirms furlough (CJRS) next steps and extends self-employment support scheme (SEISS)

Chancellor confirms furlough (CJRS) next steps and extends Self-Employment Support Scheme (SEISS)
Daily update from John Bridge OBE DL, Chief Executive

Coronavirus Job Retention Scheme (CJRS)

From 1 July 2020, businesses will be given the flexibility to bring furloughed employees back to work part time. This is a month earlier than previously announced to help support people in getting back to work. Individual firms will choose 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 UK 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 UK 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: UK 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: UK 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: UK 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.

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 HMRC.  For more information please click here 

Commenting on this from my perspective however, I believe that although the furlough scheme has helped companies preserve millions of jobs through lockdown, many firms still face significant uncertainty ahead. On that basis, closing the scheme to new applicants at the end of June feels premature, and risks undermining some of the work already done to preserve businesses and jobs.

Over the coming months, government will need to be open to providing new and additional support for businesses and staff who are unable to get back to work for an extended period, especially in sectors of the economy facing reduced capacity or demand due to ongoing restrictions.

Self-Employment Support Scheme (SEISS)

The Chancellor of the Exchequer has announced that the Government’s Self-Employment Income Support Scheme will be extended.  
Click here for further information.
 
Those eligible will be able to claim a second and final grant in August. The grant will be 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.

This extension of support for the self-employed will come as welcome relief for those who have seen their livelihoods impacted by the virus. It is right that this group continues to receive similar levels of support to those on PAYE.

1 June 2020

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