COVID-19 Government Rescue Update – 06 November 2020

COVID-19 Government Rescue Update – 06 November 2020

The government has significantly reinforced support by extending the furlough scheme and further enhancing support for the self-employed. Yesterday, the Chancellor delivered his statement to parliament setting out details of this additional support. This update covers the changes.

Coronavirus Job Retention Scheme (CJRS)

Employers

The CJRS has now been extended to operate until 31 March 2021. The main features to bear in mind are:

  • Eligible employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month.
  • Businesses will have flexibility to use the scheme for employees for any amount of time and shift pattern, including furloughing them full-time.
  • The employer does not need to have previously claimed under the CJRS in order to make a claim under this extension.
  • Employers will not be required to contribute to employees’ wages for hours not worked.
  • However, employers will be required to cover all employer’s National Insurance and employer’s pension contributions.
  • The government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more. Therefore, the government grant of 80% of an employee’s usual salary could drop and employers would be expected to contribute so that the employees can continue receiving 80% of their usual salary for hours not worked.
  • The scheme will operate as it previously did, with employers being able to claim either shortly before, during, or after running the payroll.
  • Claims for the extended CJRS can be made from 8am on Wednesday, 11 November. Employers should continue making CJRS claims for periods up to 31 October 2020, and it is expected that the claim deadline of 30 November 2020 still applies for this.
  • Claims made for November 2020 must be submitted to HMRC by 14 December 2020.
  • Claims for each subsequent month must be submitted by day 14 of the following month.
  • HMRC will publish details of employers who make CJRS claims from December onwards. The reason for publishing employers’ details is unknown at the moment, however, full details on this point are expected to be included within detailed guidance that will be published by the government next week, i.e. week commencing 9 November.
Employees

Eligibility:

  • The employee does not need to have been previously furloughed in order to be eligible for a grant under the extended CJRS.
  • An employer can claim for employees who were employed and on their PAYE payroll on 30 October 2020.
  • The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020 for that employee.
  • Re-employing workers:
    • Workers who were on the payroll on 23 September 2020, but were made redundant can be re-employed. A claim for such re-employed workers can be made under the extended CJRS.
    • The employer must have made an RTI submission from 20 March 2020 to 23 September 2020 for those employees.

Job Retention Bonus (JRB)

Employers

The JRB has been scrapped. The bonus was to be paid to employers for all furloughed employees remaining on the payroll as at 31 January 2021. As the CJRS will be in operation at that time, this incentive has been removed by the government. A separate incentive may be introduced in the future.

Self-Employment Income Support Scheme (SEISS)

First grant – Enhanced Extension

Our update of 3 November contains details of the previous enhancement made to this grant for the self-employed and individual partners of partnerships.

The first grant of this enhanced extension is the third tranche of assistance provided to self-employed individuals under  the SEISS (the Third Grant).

The Third Grant has been enhanced further to cover 80% of trading profits for 3 months from November 2020 to January 2021.

  • It will be calculated based on 80% of 3 months’ average trading profits.
  • The grant payment will be made in one single instalment.
  • A cap of £7,500 will apply to the grant.
  • The payment of this grant will be made “in good time” for Christmas.
  • The claim facility will open on 30 November 2020.

The Government has already announced that there will be a fourth SEISS grant covering February 2021 to April 2021. Further details, including the level, of the fourth grant will be provided by the government in due course.

Business Support Grants

Local Restriction Support Grant (LRSG)

Our update of 3 November provides details of support grants that are to be made available to businesses in England via local authorities. These grants will be administered under the LRSG facility.

Guarantee loan schemes

Government backed loans

The government has further extended the application window for the following loans to the end of January 2021.

  • Bounce Back Loan Scheme,
  • Coronavirus Business Interruption Loan Scheme,
  • Coronavirus Large Business Interruption Loan Scheme, and
  • Future Fund.

More details of these schemes are provided in our updates of 28 September, 5 May, 28 April and 7 April.

Bounce Back Loan Scheme (BBLS)

The BBLS rules will be adjusted to allow those businesses who have borrowed less than their allowed maximum to top-up their existing loan. The allowed maximum is the lower of £50,000 or 25% of turnover.

  • This option will be available from the week beginning 9 November 2020.
  • Businesses can only make use of this option once.

If you wish to discuss any of the key points and receive advice on how best to manage the next steps, then please contact us. We understand the difficulties that businesses face during this challenging time, and we can offer guidance to you, your business and your employees.

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