It has been a short while since we have had anything of real value to report on, but with many of the schemes offered by the government drawing to a close in this coming month, the end of last week saw Chancellor Rishi Sunak announce further extensions to both the Job Retention Scheme and the Self Employed Income Support Scheme as the pandemic stretches on further than was originally expected.
Self Employed Income Support Scheme – Update
As we are aware, this scheme originally offered 3 months at 80% of average monthly trading profits over the last 3 years, up to a maximum of £2,500 per month. This scheme was originally set to cover March-May but has now been extended, albeit with some alterations.
Self-employed individuals will be able to claim in August for the three months from June, but this time support will be at 70% of average trading profits. This time it will be capped at £6,570 in total.
Job Retention Scheme – Update
The scheme enabling employers to furlough their workers, offered up as a means to stop redundancies, was due to finish on 30th June. With the pandemic stretching on further than first thought, and many businesses still not trading, or only just starting back up with recent lockdown easing, this scheme has been extended to support both employers and employees until 31st October 2020.
New flexibility to bring back furloughed workers part-time from July was announced. This means that furloughed workers can work some hours, for which they would need to be paid at 100% of their normal rate by the Employer, and the government would pick up 80% of any shortfall. As with previously, the employer can choose to top this up if they wished, and holiday must still be paid at 100%. There will also be a new ‘taper’ system, requiring employers to contribute to furloughed salaries from August. This tapering is detailed below:
- August – The government will pay 80% up to a cap of £2,500, but will no longer cover NI or pension amounts, this will now be the responsibility of the employer.
- September – The government will now pay 70% of wages, up to a new capped amount of £2,187.50. Employers will have to top up by 10%, to make the total amount paid to the employee up to the 80% mark.
- October – The government’s contribution will again be cut by 10% to 60%, and now the cap will be £1,875. The employer will again be expected to top up the shortfall, meaning a 20% contribution from the employer.
Importantly – the scheme will close to new entrants on 30th June 2020. This means that anybody that has not been furloughed for a full 3 weeks prior to 30th June 2020 cannot be included in any claim after this date.
Statutory Sick Pay Reclaim Portal
This opened last week, so anyone who was off sick due to coronavirus, be it through self-isolating, or actually having the virus, the full 2 weeks of SSP can now be reclaimed through this portal.
It appears that there has been some great work from the government in prolonging these schemes to enable businesses to slowly return to normal trading, rather than just stop all support entirely at the originally announced dates, and hopefully this will help many businesses come out the other side of this ready to get back to where they left off, and perhaps with a new outlook as to how they can streamline their businesses, with many large companies now looking at flexible home working.
As always, we are on hand for any support or queries and don’t forget we have our ‘Cash Ready Reckoner’ available that we will look over free of charge should you want to use it, to help you reliably project your cash-flow in the coming months as the government support reduces.