Self-Employed and Job Retention Scheme changes

The Chancellor has outlined how the Coronavirus Job Retention Scheme (CJRS) will operate moving forward to allow for employees to return to work part time. Following that announcement, self-employed workers got a boost when it was revealed that they will be able to get Government assistance for a further three months.

Self-Employed Income Support Scheme (SEISS)

The Chancellor has extended the SEISS for a final three-month period to 31 August 2020.

This means that the self-employed who are eligible to claim will have received six-months financial support from government.

As before, applicants will have to wait until the last month of the claim period, August 2020, to make a claim.

A summary of the changes:

• SEISS extended for three months to 31 August 2020
• Applications covering the June – August 2020 period will open in August.
• Grant available will be 70% of eligible earnings (previous quarter 80%).
• Maximum grant for the three-months will be £6,570 (previous quarter £7,500) paid in a single instalment.
• Eligibility criteria remains unchanged.
• A self-employed person can claim for the second grant, to August 2020, even if they had not claimed for the first grant.
• More information on these changes will be published 12 June 2020.

If you are eligible to make a claim for this second grant under the scheme you will still be subject to the same rules regarding eligibility. You will need to confirm that your business has been adversely affected by the Coronavirus outbreak.

If you did not claim for the first quarter, to May 2020, as your business at that time was not adversely affected, but will be affected in the quarter to 31 August 2020, it will be possible to claim for the second quarter.

Claims for the first quarter (March-May 2020) will close 13 July 2020.

Coronavirus Job Retention Scheme (CJRS)

The CJRS has been extended to 31 October 2020 and will be changed to a flexible arrangement from 1 July 2020 to allow employees to resume part-time working.

The Treasury has always seen the scheme as a short term policy to support the economy following the impact of the COVID-19 lockdown  and the announcement begins the process of tapering and then closing the CJRS on 31 October 2020 which will force the hand of employers to consider their options. It is likely that redundancies will start to climb from that date as will the number of the unemployed.

A summary of the changes:

• The CJRS will close to new entrants on 30 June 2020. The final date employers can furlough staff for the first time will be 10 June 2020.
• From 1 July 2020, employers can bring back employees to work part-time, for any amount of time and any shift pattern. Any claim under CJRS will be limited to normal hours not worked.
• June/July 2020 – Government will continue to pay 80% of costs up to the £2,500 cap.
• August 2020 – Government will pay 80% of wages up to £2,500 cap, but employers will have to cover employers’ NIC and pension costs for the hours the employee does not work.
• September 2020 – Government will pay 70% of wages up to a reduced £2,187.50 cap. Employers will pay employers’ NIC, pension costs and 10% of wages to a total cap of £2,500.
• October 2020 – Government will pay 60% of wages up to a reduced £1,875 cap. Employers will pay employers’ NIC, pension costs and 20% of wages to a total cap of £2,500.
• The cap will be proportional to hours not worked.
• The CJRS will be closed-down 31 October 2020.

The introduction of a flexible approach cloak a raft of detail that government is not publishing until 12 June 2020. Those responsible for making CJRS claims will need to wait for these further clarifications as they will explain how employers should calculate claims.