Further support to protect jobs and livelihoods is welcome news, as the second COVID-19 lockdown is imposed

Nov 9, 2020

The Chancellor of the Exchequer, Rishi Sunak, announced last week that the UK government would provide ‘significant extra support to protect jobs and livelihoods in every region and nation’ with an extension to the Coronavirus Job Retention Scheme (CJRS).

The announcement of an extension until the end of December, given the second lockdown, has been superseded. Sunak has now extended the scheme to 31 March 2021, with flexible furloughing set to continue. The previously announced (and less-generous) Job Support Scheme has been withdrawn, as has the Job Retention Bonus.

The scheme will revert to the same conditions as when it was first introduced. 80% of the furloughed employees’ earnings will be funded by the government, up to the maximum of £2,500 per month, with employers continuing to be liable for employer’s National Insurance contributions and auto enrolment pension contributions. The level of support will be reviewed in January, in light of the prevailing economic conditions at that time.

Employers can still choose whether to top-up employee earnings paid through the scheme.

It’s not just employers and the employed that are set to benefit from increased government support. Support for the self-employed, through the Self-Employed Income Support Scheme (SEISS), is also set to increase. Again, this will revert to the same levels as when the scheme was first introduced, with the self-employed to benefit from a grant of up to £7,500 for the 3-month period to the end of January. This will cover 80% of average trading profits.

There will be a further grant paid in respect of the 3 months from February to April, at a rate to be determined.

Businesses that have been forced to close as a result of the latest restrictions may also benefit from government grants worth up to £3,000 per month, dependent on the rateable value of their property. Those in the hospitality, leisure and accommodation sectors that were affected by Tier 2/3 restrictions, could also benefit from a backdated grant of up to 70% of that amount.

The government also plans to extend their loan schemes.

Ian Harlock-Smith, Tax Director at Saffery Champness says:

“This extension of the CJRS means that the previously announced Job Support Scheme and Job Retention Bonus will no longer be introduced. The bonus was due to be paid in February to employers retaining previously furloughed staff.

“Employers across the UK can claim for employees who were employed and on the payroll on 30 October 2020. There must have been a PAYE Real Time Information (RTI) submission to HMRC notifying a payment to that employee between 20 March 2020 and 30 October 2020. This applies whether the business is open or closed.

“There is flexibility for employers to use the scheme for employees for any amount of time or shift pattern. They can furlough employees on either a full or part-time basis, and businesses will also be able to vary hours worked where there is agreement with the employee. Employees can be on any type of employment contract.

“With employees made redundant after 23 September able to be rehired and placed on furlough, employers and employees that may wish to take advantage should look into this as a matter of urgency.”

About Saffery Champness LLP

Saffery Champness LLP is a firm of chartered accountants that advises individuals and families, not-for-profit organisations and businesses across a range of sectors. As a member of Nexia International, it is part of a worldwide network of independent accounting and consulting firms.

For over 160 years, the firm’s success has been founded upon providing clients with a genuinely partner-led service and working with them to create bespoke solutions that help them to achieve their personal and business objectives. For more information visit www.saffery.com or see Twitter @Safferys