Job Retention Scheme and Self Employment Grant Update

Today Rishi Sunak announced details of how the Coronavirus Job Retention Scheme will operate from August onwards. After much lobbying from other MPs he also announced an extension to the Self-Employed Income Support Scheme. The details of both these announcements are below.

Coronavirus Job Retention Scheme (CJRS)

The Chancellor had already announced that this scheme would extend to October, staying in its existing form until the end of July. He had also already said that employers would be expected to chip in on the scheme from August onwards. We now have details of how the scheme will change.

• August 2020 – The scheme will no longer cover Employer’s NIC and pension contributions. It will still be possible to claim 80% of the normal wages of furloughed employees (capped at £2,500 per employee).
• September 2020 – The scheme will drop to only covering 70% of employee wages (capped at £2,187.50 per employee). Employees will still be entitled to a minimum of 80% of normal wages (capped at £2,500 per employee) with employers having to make up the difference.
• October 2020 – The scheme will drop to only covering 60% of employee wages (capped at £1,875 per employee). As in September, employers will have to make up the difference to pay employees at least 80% of normal wages (capped at £2,500 per employee).

The scheme will also be closed to new entrants from 30 June 2020. All employees must have had a furlough period of at least 3 weeks by this date. If you have any employees you have not yet furlough you must ensure they are furloughed by 10 June 2020 if you wish to include them in the scheme. Employees who have already been furloughed for at least 3 weeks will still qualify, even if they are not furloughed at 30 June 2020.

From 1 July 2020, the restriction on employees doing any work for their employer will also be modified. Previously doing any work ended the furlough period and any new furlough period had to be for a minimum of 3 weeks. From July employers will be able to bring workers back part-time without breaking the furlough. Employees will have to be paid in full for days worked and no furlough claim will be possible for those days. For other normal working days, furlough wages will be paid and claims can be made as before.

Self-Employed Income Support Scheme (SEISS)

Originally this only covered the 3 months from March to May 2020. The amount reclaimable was 80% of average trading profits, capped at £7,500 in total. The scheme has now been extended so that a further grant will be available. The amount reclaimable will cover a further 3 months at 70% of average trading profits, capped at £6,570 in total.

Self-employed individuals who have not already made a claim for the original grant must do so by 13 July. Applications for the extended grant are expected to be possible from August. The eligibility criteria for the second grant are the same as for the original grant. These can be found in our earlier blog post here.