Coronavirus Job Retention Scheme & Self-Employment Income Support Scheme

Following the recent government updates, we have set out below the changes announced to the above schemes:

Job Retention Scheme (Furlough)

1. This has been extended until 31^st October 2020.
2. All employees will still be entitled to a maximum of 80% of their calculated monthly payment.
3. From 1^st July the scheme will allow employers to bring back staff on a part-time basis.
4. Any employee NOT furloughed three weeks prior to the 30^th June 2020, won’t be eligible under the part-time scheme.
5. From 1^st July the minimum claim period will be reduced to one week.
6. From 1^st August, employers will be asked to contribute to the scheme – as per the below:
   

Month (Start Date)            Government Pays                           Employer Pays

1^st August 2020                  80% (Max £2,500.00)                     Employer NIC + Pension

1^st September 2020           70% (Max £2,187.50)                     10% of Wages + Employer NIC + Pension

1^st October 2020                 60% (Max £1,875.00)                     20% of Wages + Employer NIC + Pension

• There are currently no expectations for the scheme to continue past 31^st October 2020.
• Details have been released for the calculation of the flexible Job. Retention Scheme. Essentially it will involve an employer paying 80% of the standard hours / days NOT worked during the month.
  
  Example 1 
  
  Employee has a standard 100 hours per month at £10 per hour
  Employee works 60 hours during July
  Employee would receive 60 hours x £10 = £600
  Furlough aspect is 40 hours x £10 = £400 x 80% = £320
  Employee receives £920
  
  Company would claim £320 for this employee
  
  Example 2
  
  Employee works a standard 5 days per week with a salary of £1,500 per month
  Employee works 2 days per week during July
  Employee would receive £1,500 / 5 x 2 = £600
  Furlough aspect is £1,500 / 5 x 3 = £900 x 80% = £720
  Employee receives £1,320
  
  Company would claim £720 for this employee
  
  In both examples, if applicable, Employers NI & Pension could also be claimed (July only).

HMRC Guidance does allow some degree of reasonability within the calculations, which will assist when calculating the claim for employees with variable hours each month or pay period, or changeable days per week etc.

Self-Employed Income Support Scheme (SEISS)

• This scheme has been extended to allow an additional grant for the 3-month period from 1^st June to 31^st August 2020.
• Eligibility for the grant remains the same, i.e. if you were eligible for the initial grant, you will be able to claim for the second grant. Details and timescales of when you need to claim will be provided later this month.
• This grant is reduced to 70% of Self-Employed income averaged over the previous three tax years.
• In turn payment will be capped at £2,190 per month, i.e. a maximum grant payment of £6,570.

Additional information for these changes can be found on the following links:

https://www.gov.uk/government/news/chancellor-extends-self-employment-support-scheme-and-confirms-furlough-next-steps

Specific to the Flexible Furlough Scheme: (See 3.8 in the below link)

https://www.gov.uk/government/publications/find-examples-to-help-you-work-out-80-of-your-employees-wages/examples-of-how-to-work-out-80-of-your-employees-wages-national-insurance-contributions-and-pension-contributions#min-pay-flexi

Further information regarding calculations (updated 12^th June 2020)

https://www.gov.uk/guidance/calculate-how-much-you-can-claim-using-the-coronavirus-job-retention-scheme#work-out-80-of-your-employees-usual-wage