Harts CHARTERED ACCOUNTANTS

The New Coronavirus Support Package

26th Oct
Self Employed

Chancellor Rishi Sunak made significant changes to enhance the generosity of the government’s support package when the current furlough scheme comes to an end on 31st October. In addition to increasing the government’s contribution to the job support scheme and increasing the generosity of the self employed income support scheme, additional grants have been announced for businesses in Tier 2 lockdown areas.

Job Support Scheme

Our previous communications in respect of the Job Support Scheme should not now be referred to as the government has made very significant changes to the scheme. From 1st November 2020, there will be two schemes operating under the umbrella of the Job Support Scheme, one for businesses which are required to close by law, and one for all other businesses. There are now significant similarities with the outgoing furlough scheme. The schemes are in place until 30th April 2021 though the government has said the level of the government contribution will be reviewed in January.

Eligibility
Both schemes are open to any employee who was on the payroll at 23rd September 2020 and who was included on a PAYE submission made to HMRC between 6th April 2019 and 23rd September 2020. Employees who joined shortly before 23rd September 2020 but were not paid until after that date and employees who left before 23rd September 2020 and have subsequently re-joined are not eligible. New joiners since 24th September 2020 are also not eligible.

The employee does not have to have been furloughed to be eligible.

Under both schemes, the minimum claim period will be 7 days.

A claim cannot be made for an employee during their notice period (whether contractual or statutory). Nor can an employee be made redundant or put on notice of redundancy during the period within which a claim is being made for them.

There are additional criteria and restrictions for companies with more than 250 employees on payroll at 23rd September 2020.

Job Support Scheme – Open
This is the scheme for employers who are legally able to open. An employee must work a minimum of 20% of their usual hours to be eligible. This is a key difference from the current furlough scheme where the employee does not have to attend work at all.

The employee must be paid in full for the hours that they work. For the unworked hours, the employer must make a 5% contribution and the government will make a 61.67% contribution (to a maximum of £1541.75 per month). This means that the employee will receive a minimum of 73% of their normal earnings. The employer is permitted to top up the employee’s wages (this was not previously the case for the Job Support Scheme). Employer national insurance and pension contributions cannot be claimed.

It should be noted that the minimum employer contribution to wages goes up from 20% under the current furlough scheme to 24% under the new Job Support Scheme (though the employee now has to work a minimum of 20% of their normal hours). The minimum employee earnings also drop from 80% under the current furlough scheme to 73%. The government’s contribution reduces from 60% of earnings under furlough to a maximum of 49% under the Job Support Scheme.

Due to the very much reduced employer contribution for the unworked hours, it is no longer the case that it is far more efficient for an employer to retain a smaller number of staff on a larger proportion of their hours (rather than a larger number of staff on fewer hours).

The charts below show how an employee’s earnings will be made up for individuals working the minimum of 20% of their normal hours and 70% of their normal hours.

The charts below show how an employee’s earnings will be made up

Making Claims

HMRC have advised that it will be possible to make claims from 8 December 2020 and that all claims will be made in arrears. Payments will be made after the claims have been approved. See HMRC Guidance

See the Government JSSC Factsheet

Self Employed Income Support Scheme

The government has also announced an increase in the self-employed support scheme grant for November to January from 20% to 40% of earnings for affected businesses. The maximum grant will now be £3750.

See self employment income support scheme grant extension.

Business Support Grants

The government has announced that it is providing money to local authorities in Tier 2 lockdown to make grants to businesses in those areas which are not legally required to close, but whose trades are significantly affected by the current restrictions on socialising. Tier 2 areas currently include the whole of Cheshire and Stoke on Trent. The grants will also be made available retrospectively to businesses in Greater Manchester for the period between the initial imposition of additional restrictions in the summer and Tier 3 lockdown being imposed.

Click for details on grants administered by each local authority.

More generous grants are available to businesses required to close in Tier 3 lockdown areas. See details

Local Grants

We are aware that there are a number of bodies making grants. However, these schemes appear to be opening and closing at very short notice. We have attached a link to the scheme which the Cheshire and Warrington Local Enterprise Partnership is running for businesses in this area. There will be equivalents in other areas (and with different deadlines). There will also be grants available in some of the most severely hit sectors. It is worth keeping an eye on what might be available and being prepared to apply at very short notice.

Click for details on 1 million extra local support grants.

Harts Webinar Series: Success in a Changing Landscape

We continue our series of seven fortnightly interactive webinars to help keep your business agile, proactive and thriving in uncertain times. Each 45-minute sessions, hosted by Steven Glicher and guests, are designed to provide practical, really useful information and the opportunity to discuss any issues raised.

Next weeks seminar ‘Value and Pricing’ be held on Tuesday 3rd November. In the meantime view on our YouTube page along with all the previous webinars in the series.

Cheadle Office is now Open

Our Cheadle office is now open with restricted hours, please contact us before visiting.

However, Macclesfield Office remains open normal hours.

Get in Touch

Call or email us at Harts if you have any queries about topics covered above or to find out more about our services at Harts, call us on 01625 669669 or email info@harts-ltd.com

Please follow us on LinkedIn for up to date information.

Take Care

The team at Harts