Update on latest guidance for Business Support schemes

business support

As we got further into lockdown, we are conscious that the pressure on businesses and individuals had started to increase. With the latest information from Government which starts to guide us out of this first stage of lockdown, the pressure will intensify for those business and individuals as we all try to unravel what this means for us and the wider economy.

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 ensure that we disseminate relevant and up to date information as it emerges from government.

Job Retention Scheme – Update – Flexible Furloughing

As we know, the Chancellor had previously announced the extension of the Job Retention Scheme (JRS) to the end of October 2020 – with new “flexibility” applying from August.

There have been many rumours since this announced extension, speculating what this “flexibility” will look like, and how the JRS was going to be wound-up for this 1st lockdown.

On Friday, the Chancellor provided further detail on the so-called ‘flexible furloughing’, which can be summarised as follows:

  • From the earlier date (than announced previously) of 1 July 2020, employers can bring employees that have previously been furloughed back to work part-time, while still being able to claim the JRS for the remainder of the employee’s normal working hours;
  • Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period, and the employee’s actual hours worked;
  • When claiming the JRS for furloughed hours under this new ‘flexible furloughing’ system, employers will need to report and claim for a minimum period of a week;
  • Importantly, the scheme will close to new entrants from 30 June – employers will only be able to furlough employees that they have furloughed for at least a full 3 week period prior to 30 June 2020;
  • Employers will have until 31 July 2020 to make any claims in respect of the period to 30 June 2020;
  • From August 2020, the government support under the JRS will start to be reduced down, as follows:

    o August 2020: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions (i.e. the government’s contribution to the class 1 NIC liability and pension contribution liability is removed).

    o 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.

    o 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.

    Smaller employers will not be significantly impacted by this reduction in support given the availability of the NIC ‘employment allowance’.

    The reductions in support aren’t as significant as had been feared /rumoured, and appears to represent a ramp as opposed to the obviously unwanted ‘cliff-edge’.

    However, there was no specific carve-out for sectors impacted by continued enforced closure (such as the leisure and hospitality sector), which is extremely disappointing.

    The government’s published press release can be found here.

Self-employed income support – Update

In the same update, the Chancellor announced an update for the self-employed income support scheme (SEIS). There had been increasing pressure to do so since the announcement that the JRS was to be extended (where there was no mention of such an extension for the SEIS).

It has now been announced that the SEIS will be extended – with those eligible able to claim a second and final grant in August 2020 (when applications for this 2nd grant will open).

This 2nd grant will be worth 70% of the self-employed individual’s average monthly trading profits (note that the 1st grant was worth 80% of the self-employed individual’s 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 for this 2nd grant is the same for the 1st grant.

An individual does not need to have claimed the 1st grant to be eligible to receive the 2nd grant.

Further guidance on the 2nd grant will be published on Friday 12 June 2020.

Individuals can continue to apply for the 1st grant until 13 July 2020.

Whilst the extension is obviously welcomed, none of the issues relating to eligibility for the 1st grant have been rectified.

The government’s published press release can be found here.


Coronavirus Statutory Sick Pay (SSP) Rebate Scheme

From 26 May 2020 (last Tuesday), applications can be made for the coronavirus SSP rebate scheme (originally announced by the Chancellor at the Budget – that feels a very long time ago now!).

The scheme allows employers with fewer than 250 members of staff (on 28 February 2020), to apply to recover the costs of paying coronavirus-related SSP.

The rebate will cover up to 2 weeks of SSP from either 13 March 2020, if an employee had coronavirus symptoms or was self-isolating (e.g. because someone they live with has symptoms), or from 16 April 2020 if an employee was ‘shielding’ because of coronavirus.

The government guidance can be found here.

If we can help and advise you in any way, please get in touch with your usual RRL Team member, 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 will provide further updates, as and when further announcements are made and detail/guidance released.