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The week started with the last-minute reprieve of the Job Retention Scheme for November and ends with the scheme being extended through to March 2021.
The Chancellor has announced that, for December and January, the scheme will continue to cover 80% of an employee’s current salary for hours not worked, up to a maximum of £2,500. Flexible furloughing will continue to be allowed in addition to full-time furloughing. The employer will remain responsible for the National Insurance and pension contributions for hours not worked along with the full costs of hours worked.
The Government will review the landscape in January to determine whether an additional employer contribution would be appropriate.
As well as providing much-needed certainty for those businesses severely impacted by COVID-19, this also offers a lifeline for businesses that suffer turbulence from Britain leaving the European Union on currently unspecified terms on 31st December.
In a major change, employees that were employed and on the payroll on 23rd September 2020, which was the day before the Job Support Scheme was unveiled, and were then made redundant or stopped working can be re-employed and furloughed.
The Government also announced increased support under the third instalment of the Self-Employment Income Support Scheme, with people receiving 80% of average trading profits for the November to January period. The online service for this grant will be available from 30th November 2020.
There will be a fourth grant covering February to April 2021 and the Government will set out further details, including on this in due course.
It is important to remember that these grants are taxable income and also subject to National Insurance contributions.
Whilst this is welcome news for those already on the scheme, to qualify for this third tranche, self-employed individuals, including members of partnerships, must:
This means that the original eligibility criteria remain the basis. These being that the individual:
It seems extraordinary and, quite frankly, shameful that those groups that have fallen through the cracks continue to remain on the outside.
The individual who started their self-employment after the 2018-19 tax year, the freelancer working through their limited company and many small business owners are left neglected other than, potentially, access to Universal Credit.
Given that that the filing deadline for the 2019-20 Self-Assessment falls within the period of the third grant, it is inexplicable to why it cannot be used as the eligibility base.
As well as those who started trading in the 2019-20 tax year, this would also extend the level of support two other groups. Those whose self-employment income has declined to below the £50,000 average threshold in the year and those who started their self-employment part way through the 2018-19 tax year.
Whilst the Job Retention Scheme is a vital lifeline for many small businesses, the stark reality is that those business owners whose remuneration had been driven primarily through dividends and whose business has been crushed by COVID-19 are getting no tangible personal support. One wonders how many of these businesses will survive into the spring.
In other announcements:
The original Job Retention Scheme was due to end at midnight on 31st October to be replaced by the Job Support Scheme. In a dramatic development, literally hours before the deadline, the scheme has been extended to cover the period of the new national lockdown to December.
In addition, the scheme is reverting to the position in August covering 80% of an employee’s current salary for hours not worked, up to a maximum of £2,500.
Flexible furloughing will continue to be allowed in addition to full-time furloughing. The employer will remain responsible for the National Insurance and pension contributions for hours not worked along with the full costs of hours worked.
Broadly, the scheme will continue to operate in the same manner as before. However, there are a couple of significant changes:
The Job Support Scheme has been postponed until the furlough scheme ends.
The government also announced that businesses required to close in England due to local or national restrictions will be eligible for the following to the following grants through their local authority:
Finally, the period for mortgage payment holidays was also due to end on 31st October. This has also been extended. Borrowers who have impacted by COVID-19 who are yet to have a mortgage payment holiday will be entitled to a six month holiday whilst those who have started will be able to top up to six months without this being recorded on their credit file.
The original Job Retention Scheme was due to end at midnight on 31st October to be replaced by the Job Support Scheme. In a dramatic development, literally hours before the deadline, the scheme has been extended to cover the period of the new national lockdown to December.
In addition, the scheme is reverting to the position in August covering 80% of an employee’s current salary for hours not worked, up to a maximum of £2,500.
Flexible furloughing will continue to be allowed in addition to full-time furloughing. The employer will remain responsible for the National Insurance and pension contributions for hours not worked along with the full costs of hours worked.
Broadly, the scheme will continue to operate in the same manner as before. However, there are a couple of significant changes:
– neither the employer nor the employee needs to have previously used the scheme to be eligible; and
– an employee must be on an employer’s PAYE payroll before 31st October 2020. In practice, this means a Real Time Information submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.
The Job Support Scheme has been postponed until the furlough scheme ends.
The government also announced that businesses required to close in England due to local or national restrictions will be eligible for the following to the following grants through their local authority:
– for properties with a rateable value of £15,000 or less, £1,334 per month or £667 per two weeks;
– for properties with a rateable value of between £15,001 and £51,000, £2,000 per month or £1,000 per two weeks;
– for properties with a rateable value of over £51,000, £3,000 per month, or £1,500 per two weeks.
Finally, the period for mortgage payment holidays was also due to end on 31st October. This has also been extended. Borrowers who have impacted by COVID-19 who are yet to have a mortgage payment holiday will be entitled to a six month holiday whilst those who have started will be able to top up to six months without this being recorded on their credit file.