Chancellor Rishi Sunak announced important changes and additional support this afternoon for businesses affected by COVID-19.  While we await the full detail from the Government, we've summarised the key changes announced and where we are now with the Job Retention Scheme and the Self Employment Income Support Scheme. 

Enhanced Job Support Scheme from 01 November 2020 - an update from our Head of Payroll, Michael McAllister

The chancellor's announcement reduces the employer contribution to those unworked hours to just 5%, and reduces the minimum hours requirements to 20%, so those working just one day a week will be eligible.

Before, the rules stated that employees on the scheme have to work a minimum of 33% of their hours to be eligible, and businesses must contribute a third of wages.

Key Points

• The JSS starts to operate from 1 November and covers all Nations of the UK. For every hour not worked, the employee will be paid up to two-thirds of their usual salary
• The government will provide up to 61.67% of wages for hours not worked, up to £1541.75 per month (more than doubling the maximum payment of £697.92 under the previous rules)
• The minimum number of hours employees must work has today been lowered to a fifth of their contracted hours

Employers will continue to receive the £1,000 Job Retention Bonus. The Job Support Scheme Closed, for businesses legally required to close, remains unchanged.

The contributions above apply to all businesses affected by COVID-19 but aren’t legally required to close. For those businesses mandated to close (Tier 3 in England but unknown in Scotland) the government will pay the employee 67% (subject to a cap) but employers will be required to pay the National Insurance and minimum pension cost.

*Update 23 October - further guidance has now been released, and we've written a more detailed blog that explains the eligibility criteria and how each scheme will work. We expect HMRC to publish detailed calculated examples by the end of October.*

If you have any questions, on the above, please contact our Head of Payroll, Michael McAllister on Michael.Mcallister@jcca.co.uk.

Self Employed Income Support Scheme (SEISS) where we are now - an updated by our Tax Senior Manager, Senga Prior

Phase 2 of the scheme which awarded support equal to 70% of 3 months’ average trading profits closed on 19 October 2020. The maximum award was restricted to £6,750.

HMRC have added a facility to allow claimants to track the progress of their claim and/or change bank details if they have been asked to do so by HMRC. You will need your original log on details to access this and accountants will not be able to do so on behalf of their clients unfortunately. 

Phase 2 was to be the final SEISS grant. However, due to the ongoing Covid-19 situation a third phase covering November 2020 to April 2021 was announced on 2 October. This will be in 2 stages November 2020 to January 2021 and February 2021 to April 2021.

For both stages of Phase 3 claimants will need to have been adversely affected by Covid 19 during the claim period. It is not necessary to have made a claim at Phase 1 and/or Phase2 and the income eligibility criteria is the same as the previous phases. Claimants will need to declare that they are actively trading but are impacted by reduced demand or were trading but temporarily unable to do so due to Covid-19.

The first stage of phase 3 was originally to award 20% of average profits but on 22 October the chancellor announced that this would be increased to 40% and capped at £3,750. The level of the second grant has not yet been set. We'll update our guidance as soon as we hear more.

As yet no details of the claim method have been announced but it is likely to be similar to the previous 2 phases.

We'll update our guidance as soon more detail is announced on the tier system in Scotland and further details are released from UK Government. 

If you have any questions, on the above in the meantime, please contact our Senga Prior, Senior Tax Manager on Senga.Prior@jcca.co.uk.