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01
Jun

June 2020 Update - Support for Employers & Self-Employed

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Firstly and most importantly, in these challenging times, we are all navigating through uncertainty for ourselves, our loved ones and our community. The whole team at LBW hope that you, your friends and families are staying healthy, well and safe.

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On 29th May 2020 the Chancellor, Rishi Sunak, announced more details about the extension to the Coronavirus Job Retention Scheme (CJRS) and The Self-Employed Income Support Scheme (SEISS), with the key details outlined below for you.

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From 1‌‌ July 2020, businesses will have the flexibility to bring previously furloughed employees back to work part-time – with The Government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August 2020. This flexibility comes a month earlier than previously announced to help people get back to work.

Businesses can decide the hours and shift patterns that there employees will work on their return and businesses will be responsible for paying their wages in full while working. This means that employees can work as much or as little as your business needs, with no minimum time that you can furlough staff for.

Any working hours arrangement that businesses agree with their employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, businesses will need to report and claim for a minimum period of 1 week. Businesses can choose to make claims for longer periods such as on monthly or two weekly cycles if they prefer. Businesses will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

If businesses employees are unable to return to work, or businesses do not have work for them to do, they can remain on furlough and can continue to claim the grant for their full hours under the existing rules.

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From August 2020, The Government grant provided through The Job Retention Scheme will be slowly tapered.

  • in 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 for the hours the employee doesn’t work – employers will have to pay employees for the hours they work
  • in August, The Government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed
  • in September, The Government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500
  • in October, The Government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500
  • the cap on the furlough grant will be proportional to the hours not worked.

If you are a smaller employer, some or all of your employer NIC bills will be covered by the Employment Allowance, so you should not be significantly impacted by that part of the tapering of The Government contribution.

Around a quarter of CJRS monthly claims relate to wages that are below the threshold where employer NICs and auto enrolment contributions are due, and so no employer contribution will be required for these furloughed employees in August.

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It’s important to note that the scheme will close to new entrants from 30‌‌ June 2020

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 2020.

This means that the final date that you can furlough an employee for the first time will be 10‌‌ June 2020 for the current three-week furlough period to be completed by 30‌‌ June. 

Employers will have until 31‌‌ July 2020 to make any claims in respect of the period to 30‌‌ June 2020.

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  • The SEISS is to be extended. 
  • Self-employed individuals will be able to make a claim for a second and final grant in August 2020.
  • The online portal for the second and final grant is not available yet.
  • If you’re eligible, the second and final grant will be a taxable grant worth 70% of your average monthly trading profits, paid out in a single instalment covering a further 3 months’ worth of profits, and capped at £6,570 in total.

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Stay vigilant about scams, which may mimic government messages as a way of appearing authentic and unthreatening. Search 'scams' on GOV‌.‌‌UK for information on how to recognise genuine HMRC contact. You can also forward suspicious emails claiming to be from HMRC to phishing@hmrc.gov.uk and texts to 60599.

Alternatively, if you are unsure about any correspondence you receive from HMRC, please speak to a member of the LBW team to check its authenticity. 

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