You can flexibly furlough employees from 1 July

Last updated: 26 June 2020, 09:00

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You can flexibly furlough employees from 1 July. A just-published Treasury Direction sets out the framework.

From 1 July, a flexible furlough scheme is being introduced which means that you can bring back to work employees who have been furloughed before this date for at least three weeks (or who have not been previously furloughed but are returning from statutory maternity and paternity leave) for any amount of time and any shift pattern while still being able to claim a grant for any of the usual hours that they are not working.

Some contribution towards the cost of the scheme will begin from 1 August and the amount of contribution will increase in September and in October until the scheme ends on 31 October.

COVID-19: Self-employed to receive second grant worth 70% of earnings

Last updated: 2 June 2020, 09:00

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COVID-19: Self-employed to receive second grant worth 70% of earnings

The government has announced that the self-employed will receive another grant to cover June, July and August if their business has been affected by coronavirus. Are your clients eligible and how can you help them?

Who can get the grant? 
Self-employed individuals or members of a partnership are eligible for a grant representing up to 70% of their average profits if they meet the following criteria:

  • they submitted a tax return for 2018/19
  • their business traded during 2019/20
  • their business is continuing to trade, or would be except for coronavirus
  • they intend to continue trading in 2020/21
  • they have lost trading/partnership trading profits due to coronavirus
  • their trading profits were less than £50,000 and represented more than half of their total taxable income.

How much will they be paid? 
Individuals will get a taxable grant which will be 70% of the average profits from the tax years 2016/17 to 2018/19. If they became self-employed during those years, HMRC will use the average for the years they submitted tax returns for. The maximum amount is £2,250 per month for three months, so to get the full amount your client would need to have average profits of £38,570 per annum. Applications for this second and final grant will open in August.

Can the self employed  apply if they haven’t claimed the first grant? 
Absolutely, individuals can continue to apply for the first grant until 13 July 2020. They don’t need to have claimed the first grant to receive the second grant, for example, if their business has only recently been affected by coronavirus.

If you were eligible for the first grant, HMRC should have contacted you already. You can check your eligibility here

COVID-19: Coronavirus Job Retention Scheme (CJRS)

Last updated: 1 June 2020, 09:00

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COVID-19: Coronavirus Job Retention Scheme (CJRS)

The Chancellor has just announced major changes to the Coronavirus Job Retention Scheme (CJRS). There’s good news and bad – how might you be affected?

Employer contribution.
Under the CJRS currently, you can claim 80% of a furloughed employee’s salary up to £2,500 per month plus employers’ NI and the minimum auto-enrolment pension contribution. From August you will need to start contributing towards the cost of furloughing. This will be on a sliding scale as follows:

  • From August, you will have to pay the employers’ NI and the minimum auto-enrolment pension contribution
  • From September, you will also have to contribute 10% of furlough pay. This means that you will only be able to claim 70% of furlough pay and you must make up the difference so that your furloughed employees continue to receive the 80% minimum.
  • From October, this contribution increases to 20% of furlough pay. This means that you will only be able to claim 60% of furlough pay and you must make up the difference so that your furloughed employees continue to receive the 80% minimum.

Flexible furloughing from July.
From July, you can ask furloughed employees to work on a part-time basis while remaining on furlough for the rest of the time. This is new, before this date furloughed employees were prohibited from doing any work for you.

Access to the CJRS.
From July, the CJRS will only be available to employers that have previously used it in respect of employees they have previously furloughed. The CJRS will therefore close to new entrants from 30 June. From this point onwards, you will only be able to furlough employees that you have furloughed for a full three-week period prior to 30 June. This means that the final date by which you can furlough an employee for the first time will be 10 June, in order for the three-week furlough period to be completed by 30 June.

End date.
The Chancellor has confirmed that the CJRS will close on 31 October