As we got further into lockdown, the pressure on businesses and individuals started to increase. As we start to come out of this 1st lockdown, the same pressure will intensify for those businesses and individuals. This week is obviously a significant week for the release of the lockdown.
Whilst lockdown restrictions are easing, we recognise that, whilst this is welcomed, it is inevitably going to put a strain on businesses and individuals given there are some big and tough decisions to make.
We can assure you of our continued commitment to provide as much advice, guidance and support as you need to help you to come through this as best as you possibly can. Communication is imperative and we will continue to ensure that we disseminate relevant and up to date information as it emerges from government.
Job Retention Scheme – ‘Flexible Furloughing’ – Updated Guidance
Updated guidance has now been released for the Job Retention Scheme (JRS) to reflect the new ‘flexible furloughing’ that comes into effect on 1 July 2020.
As explained in a previous update (see here) when the concept of ‘flexible furloughing’ was announced, from 1 July 2020, the JRS has more flexibility allowing claims on a form of pro rata basis. The JRS can be claimed from this date for staff that work some of the week and be furloughed for the remainder, in proportions to be agreed with the employer.
Employers will need to calculate the relevant employee’s usual working hours for these purposes.
The guidance confirms that flexible furlough agreements can last any amount of time (i.e. not limited to the 3 weeks that the JRS for periods up to 30 June 2020 were governed by).
Where employers intend to use the new ‘flexible furlough’ scheme, they need to ensure the relevant paperwork is in order and process followed with each employee. The guidance states:
“If you flexibly furlough employees, you’ll need to agree this with the employee (or reach collective agreement with a trade union) and keep a new written agreement that confirms the new furlough arrangement. You’ll need to:
- make sure that the agreement is consistent with employment, equality and discrimination laws
- keep a written record of the agreement for five years
- keep records of how many hours your employees work and the number of hours they are furloughed (i.e. not working).”
We suggest seeking advice from your employment lawyer/s or HR adviser here.
Employers will only be able to make a claim for employees from 1 July 2020 that they have previously successfully made a claim for. Such an employee must have been furloughed for a minimum 3 week period between 1 March 2020 and 30 June 2020. Unfortunately, if an employee has not previously been furloughed at today’s date, a JRS claim cannot be made for them going forwards (the cut-off date being 10 June 2020).
Note that the rules differ here for employees returning from statutory parental leave, and therefore the position should be checked in these cases.
A crucial point to be aware of, is that a cap has been introduced for the number of employees that can be subject to a JRS claim from 1 July 2020. The number of employees an employer can make a claim for from 1 July 2020 cannot exceed the maximum number of employees that the employer made a claim for in the period to 30 June 2020. The government uses the following example in the guidance:
“For example, an employer had previously submitted three claims between 1 March 2020 and 30 June, in which the total number employees furloughed in each respective claim was 30, 20 and 50 employees. Then the maximum number of employees that employer could furlough in any single claim starting on or after 1 July would be 50.”
As we advised in a previous update, the benefits of the JRS will be reduced each month from July 2020 as follows:
- August 2020: The government will pay 80% of wages up to a cap of £2,500 per furloughed employee. Employers will pay employer (ER)NICs and pension contributions (i.e. the government’s contribution to the class 1 NIC liability and pension contribution liability is removed).
- September 2020: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
- October 2020: 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.
The guidance makes it clear that JRS claims must be submitted on or before 31 July 2020 for periods ending on or before 30 June 2020.
Claims for periods post 30 June 2020 can only be made from 1 July 2020 onwards.
The guidance reiterates that the JRS will cease on 31 October 2020, this signalling the winding-down of the scheme.
Self-Employed Income Support – 2nd Grant – Updated Guidance
Updated guidance has also been released for the Self-Employed Income Support (SEIS) to reflect the new 2nd grant, representing the extension of the scheme.
This guidance can be found here.
Qualifying self-employed individuals can claim the 2nd grant if their business has been adversely affected by COVID-19 on or after 14 July 2020.
The 2nd grant will be 70% of the individual’s average monthly trading profits, paid out in a single instalment covering a further 3 months’ worth of profits, and capped at £6,570 in total. The 1st grant was worth 80% of the individual’s average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total.
Claims for the 2nd grant will be able to be made in August 2020. The eligibility criteria is the same for the 2nd grant as it was for the 1st grant.
You can claim for the 2nd grant even if you did not make a claim for the 1st grant.
The guidance makes it clear that the 2nd grant is the final grant that will be made under the scheme.
Remember, those eligible to claim the Self-Employed Income Support 1st grant must do so by 13 July 2020 (as we mentioned in our last update).
Also remember, the grants are taxable, being subject to income tax and NIC. There is a concern that some individual’s may not be aware, or have forgotten this.
Tourism and Leisure
Visit Cornwall have been running useful webinars that discuss a number of different topics to assist businesses in the sector.
These can be found here.
If we can help and advise you in any way, please get in touch with your usual RRL contact, we continue to work remotely to keep our staff and clients safe and our telephone contact details can be found here. We will respond to emails as usual. We are conducting meetings virtually (using Microsoft Teams).
We will provide further updates, as and when further announcements are made and detail/guidance released.