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A summary of COVID-19 guidance for employers, businesses and the self-employed

Rishi Sunak, the Chancellor of the Exchequer, has announced that the government’s Self-Employed Income Support Scheme will be extended. Sunak has also provided more details relating to the Job Retention Scheme, which gives businesses the ability to furlough staff. These announcements will give more security to individuals and businesses whose livelihoods have been adversely affected by the coronavirus pandemic.

Please find below a summary of the updated support available for individuals by the Government in response to the coronavirus.

 

Job Retention Scheme (Furlough Scheme)
The Chancellor outlined further details on the extension of the Coronavirus Job Retention Scheme, including improved flexibility to bring furloughed employees back to work part time in July, and a new taper requiring employers to contribute modestly to furloughed salaries from August.

From 1 July 2020, businesses will be given the flexibility to bring furloughed employees back to work on a part time basis. Individual firms will decide the hours and shift patterns their employees will work on their return, and will be responsible for paying their wages while in work.

From August 2020, the level of government grant provided through the job retention scheme will be slowly tapered to reflect that people will be returning to work. That means that for June and July the government will continue to pay 80% of people’s salaries. In the following months, businesses will be asked to contribute a modest share but, crucially, individuals will continue to receive that 80% of salary covering the time they are unable to work. The scheme updates mean that the following will apply for the period people are furloughed:

• June and July: The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything.
• August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.
• September: 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. For the average claim, this represents 14% of the gross employment costs.
• October: 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. For the average claim, this represents 23% of the gross employment costs.

Please note claims from July onwards will be restricted to employers currently using the scheme and previously furloughed employees. The scheme will close to new entrants on 30 June, with the last three-week furloughs before that point commencing on 10 June.

 

Sick pay
Currently £94.25 a week, rising to £95.85 for 2020/21, would be available to employees from day one instead of day four, including for those advised to self-isolate. However, there was no change in the minimum earnings threshold for SSP (£118 a week currently, rising to £120 a week in 2020/21).

 

Benefits
From 6 April 2020, for 12 months, the standard allowance in Universal Credit (UC) and the basic element in Working Tax Credit (WTC) will be increased by £20 a week over and above the planned annual uprating. This will apply to all new and existing UC claimants and to existing WTC claimants.

 

Mortgages
For those in difficulty due to coronavirus, mortgage lenders have extended the option for a mortgage payment holiday by a further three months.

 

Renters/ landlords
Emergency legislation to suspend new evictions from social or private rented accommodation while this national emergency is taking place. No new possession proceedings through applications to the Court to start during the crisis. Landlords will also be protected as the three-month mortgage payment holiday is extended to Buy to Let mortgages.

 

Self-employed individuals Income Support Scheme
Through the Self Employment Income Support Scheme (SEISS) the self-employed (including partners), the majority of who’s income is derived from self-employment, can secure a taxable direct grant of 80% of their average profit for the three tax years ending with the 2018/19 tax year or a shorter period (even just the 2018/19 tax year) if three years’ accounts are not available. This is subject to a maximum payment of £2500 per month.

To qualify, the 2018/19 profit or average profit for up to three years ending with 2018/19 must not exceed £50,000. Grant to run for three months and payment (representing a cumulative three months’
rights) is expected in June. Claimants can continue to work and generate profit. HMRC to invite claims based on records they have.

Those eligible under the Self-Employment Income Support Scheme (SEISS), will have already claimed their first grant for March – May 2020. Those eligible will now be able to claim a second and final grant in August covering June – August 2020.

Other key points are listed below:
• Individuals can continue to apply for the first SEISS grant until 13 July. Under the first grant, eligible individuals can claim a taxable grant worth 80% of their average monthly trading profits, paid out in a single installment covering three months worth of profits, and capped at £7,500 in total.
• Applications for the second grant will open in August. Individuals will be able to claim a second taxable grant worth 70% of their average monthly trading profits, paid out in a single installment covering three months worth of profits, and capped at £6,570 in total.
• The eligibility criteria are the same for both grants, and individuals will need to confirm that their business has been adversely affected by coronavirus.

 

Benefits
For those not entitled to SSP (e.g. the self-employed and gig economy workers), Contributory Employment and Support Allowance (ESA – a basic £73.10 a week for those 25 and over, rising to £74.35 in 2020/21) will be claimable from day one instead of day eight. To ensure that time off work due to sickness is reflected in benefits, the minimum income floor** in Universal Credit (UC) is temporarily removed if an individual gets coronavirus or has to stay at home because of it. The minimum income floor won’t apply to anyone after 6 April 2020. This will last until the coronavirus outbreak is over. The stated aim is to ensure every self-employed person can now access, in full, UC at a rate equivalent to SSP for employees.

 

Grants
£10,000 grant for all small businesses that qualify for Small Business Rates Relief (SBRR) or Rural Rates Relief. For SBRR, the rateable value of the property used by the business needs to be valued at £15,000 or less.
£25,000 grant for businesses in hospitality, leisure and retail whose rateable value is between £15,000 – £51,000. Local Authorities responsible for delivering the funding to eligible businesses. They will then be reimbursed by the Government.

 

Business loans
Business interruption loans are available to small and medium businesses from 23/03/2020 for up to £5 million, interest free for 12 months. This scheme will help any viable business with a turnover of up to £45m.

 

Business premises rent
Commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction.
No business will be forced out of their premises if they miss a payment in the next three months.

 

Business rates
Business Rates holiday for businesses in hospitality, leisure and retail, plus estate agents, lettings agencies and bingo halls, for 12 months.

 

Self-assessment payments
Self-Assessment payments due 31 July 2020 deferred until 31 January 2021 – interest and penalty free.

 

VAT
For the period between 20 March 2020 and 30 June 2020, businesses will not need to make a VAT payment. No special application needed. Businesses will have until the end of the 2020/21 to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the Government as normal.

 

Renters
Emergency legislation to suspend new evictions from social or private rented accommodation while this national emergency is taking place. No new possession proceedings through applications to the Court to start during the crisis. Landlords will also be protected as the three-month mortgage payment holiday is extended to Buy to Let mortgages.

 

If you have any questions relating to the support and guidance available please do not hesitate to contact us. Call 01823 273130 or complete an enquiry form and we will get back to you as soon as possible. If you are an existing client please contact your Adviser, who will be delighted to assist you.

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