Furlough extensions for the employed and grant extensions for the self employed
As individuals and businesses alike continue to face the challenges brought on by the pandemic, the government has announced further measures of support for both the employed and self employed. Prior to the announcement of a second lockdown, the Job Support Scheme (JSS) was put in place to replace the Coronavirus Job Retention Scheme (CJRS), also known as the furlough scheme, as it came to an end. Now that the furlough scheme has been extended to cover the second lockdown, the JSS is on hold until March at the earliest, and potentially indefinitely.
An extension and subsequent increase to the Self Employment Income Support Scheme (SEISS) grant has also been announced, which is set to continue throughout the second lockdown and beyond. Here we will present to you the basics of each of the schemes.
The Coronavirus Job Retention Scheme (CJRS) refers to the furlough scheme that we have seen support businesses and employees throughout the year. After initially being extended until the 2nd December, it has now been extended further until the end of March to, in Chancellor Rishi Sunak’s words, “give businesses security throughout the winter.”
Employees will receive 80% of their salaries for hours not worked up to a maximum of £2,500. The extended scheme will also see a reduced cost for employers to retain staff, relative to the previous furlough scheme, making it a more generous scheme for employers. Under this new scheme, businesses will have the choice to furlough their staff full time or bring them back to work on a part-time basis. Employers will only be asked to cover National Insurance payments and pension contributions, amounting to just 5% of total employment costs for the average claim.
In addition to the furlough scheme, businesses that are forced to close their premises will be eligible to receive grants of up to £3,000 per month, through the Local Restrictions Support Grant.
The Job Support Scheme, which was due to begin in November but has now been postponed, is made up of two parts. The first, named JSS Open, would be available to those businesses which are still able to operate but are faced with reduced demand and require support paying wages. The second, JSS Closed, would be specifically for those businesses which are legally required to close their premises due to the implementation of Covid-19 restrictions put in place by any of the four governments of the UK. The details of the JSS schemes may change before they are implemented, and may no longer be implemented at all due to the furlough extension, but it’s good to be aware of what may be expected when the CJRS comes to an end.
For those who are self employed and whose income has been affected by the pandemic, the SEISS grants have been extended. Lasting for 6 months, from November 2020 to April 2021, the grants will arrive in 2 lump sum payments designed to cover 3 months each. The first payment, which will cover 1st November 2020 until 31st January 2021, was initially announced to cover 40% of average monthly profits however this figure has now been increased to 80%. This means that the SEISS payment for these months will be a taxable grant amounting to 80% of average monthly profits, for 3 months, up to a total amount of £7,500. Applications for this grant will open on 30th November.
The second payment will cover 1st February 2021 until 30th April 2021. The amount payable will be reviewed and set by the government at a later date.
In order for employees, individuals and businesses to be eligible for either furlough or the SEISS grant they will be required to adhere to certain criteria. For further information, please refer to the official Government information or speak to a professional for further help.