Changes to the Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme
The Chancellor of the Exchequer has as expected this afternoon announced changes to the Government’s Coronavirus Job Retention Scheme (Furlough) and the Self-Employment Income Support Scheme
Here are those changes in outline.
The Coronavirus Job Retention Scheme (FURLOUGH)
Companies wishing to make claims for new employees under the Coronavirus Job Retention Scheme will not be able to do so after 10 June, with the full-time furlough scheme closing on 30 June.
June and July – No Employer contributions and the taxpayer to pay up to 80% of salary capped at £2500. Part-time working will however be allowed under furlough from 1 July, not 1 August as previously announced, but only for those employees already in the full-time furlough scheme. The Chancellor said the “new, more flexible furlough” means “employers will have the maximum possible flexibility to decide on the right arrangements for them and their furloughed staff”.
August – Employers to pay employer national insurance contributions on income and pension contributions (5% of employment costs) The taxpayer to continue paying 80% of salary capped at £2500.
September – The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay Employer’s NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.
October – The government will pay 60% of wages up to a cap of £1,875. Employers will pay Employer’s NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.
The scheme will then end after 31 October.
Self-Employment Income Support Scheme – to be extended with a further final grant up to £6,500 or 70% of average monthly trading profits measured over three months.
There will be no further extension to the scheme.
If you have any questions about the Coronavirus Job Retention Scheme or the Self-Employment Income Support Scheme then contact Steven Eckett – Partner and Head of Employment at Meaby & Co LLP. seckett@meaby.co.uk or 020 703 5034.
