BREAKING – Government to double Self Employed Grant to 80%

Rishi Sunak has announced that the government will double the Self Employed Income Support Scheme (SEISS) to 80% of your average trading profit for November and a further 40% for December and January up to a maximum of £5160.

This payment has also been brought forward to 30th November 2020 rather than the 14th December to help with latest lock down restrictions starting on the 5th November 2020.

No details have been confirmed for the February payment.

Self employment grants doubled for both November and February

Chancellor Rishi Sunak has just announced, along with expanded support for businesses moved to tier 2 and 3 restrictions, an increase to the next two self employed grant payments from 20% to 40% of earnings up to a maximum of £3750 per month for those that are still seeing a significant impact to their business during this second wave of Covid.

Grants will be available to cover the three month period of November to January and then again in February.

Employees can now claim for tax relief on working from home costs…

A question that I get asked all the time since lockdown began is should an employer be paying a contribution for gas and electric costs for all employees working from home as their usage is now higher.

Legal, unless there is something in their employment contract that says you will, there is no precedent for this. Morally, well that’s a different story.

However, there a little tiny light of help for staff in the form of tax relief. I has been commonly known that self-employed people working from home can make deductions before tax for heating, lighting and some other home office costs but this is now also available to those working from home due to Coronavirus.

From the 6th April 2020 employees can claim the percentage of tax they pay from £6 per week without providing a breakdown of costs. So if they are in the 20% tax bracket they will receive 20% of £6 = £1.20 of tax relief per week that they work from home for any amount of time (this does not need to be full time). They can claim for more than this but they will need to provide receipts, contracts or other evidence of the exact cost.

There are a few conditions though – there always are!

To claim it must be that you have given the employees no other choice but to work from home i.e. your office has closed or all staff are on a rota system to work from home to comply with Covid risk assessments, they can not claim if you simply choose to work from home.

Employees must personally register with the Government Gateway and fill out a P87 form. Many PAYE employees will have never needed to register with the tax gateway before and the system can be confusing. However, they should only have to go through this process once as this will register with the tax code your payroll has and so the tax relief will be calculated in their salary.

It may not seem like much but as one large supermarket used to say – every little helps!

The next phase of government schemes – what next?

The start of August has seen new restrictions for many across the north of England and a pause in the easing of certain lockdown regulations for at least two weeks. With many wild rumours and suggestions of what lockdown might look like next, the planned changes to the Furlough scheme have continued to go ahead.

From August 1st 2020 employers will now have to start taking back financial responsibility for their employees with a staged phasing out of the furlough scheme over the coming months. The stay at home guidelines have also changed from work from home if you can to it is your employers choice if you can continue to work from home.

It has been widely reported today that Charlie Mullins, CEO of national company Pimlico Plumbers has today sacked a number of staff for refusing to come back to work after being taken off the Furlough scheme. As much as an employee does not have the right to refuse a reasonable request, they do have the right to feel safe at work. Employers must ensure they have all the necessary health and safety Covid 19 measures in place and are not asking employees to put themselves at unnecessary risk when they could safely continue to work from home. It is also recommended that managers speak to individuals directly to address their specific concerns, especially those who have up until recently been shielding, and support each employees’ successful return to work.

For those still furloughed away from work the key dates are;

1st August – employees are still paid 80% of their salary up to £2500 per month by the government and their employer may choose to pay the remaining 20%, but employers must now make pension and company national insurance contributions.

1st September – employees will still receive 80% of their salary up to £2500 per month however the government will reduce payments to 70% of their salary with employers paying the final 10% to complete the 80% payment (employers can still choose to pay the remaining 20% of the salary)

1st October – Employees will receive 80% of their salary up to £2500 per month but the government Furlough scheme will be reduced to 60% with employers paying the final 20% (again employers can pay the final 20% if they wish)

This phasing out is with the view that all employees should be able to return to work full time (whether at a company location or working from home) however with the potential second wave of Covid 19 looming, additional financial pressures for employers at a time when general spending is low could bring large amounts of redundancies in all sectors.

At the end of July the government confirmed that the redundancy process and final redundancy payments are not subject to any change due to Coronavirus regulations and that payments should be at 100% of salaries irrespective of whether and employee is on Furlough or not at the time of redundancy. It has also been confirmed that an employee being on Furlough can not be used as a criteria for redundancy.

We are also heading towards the second Self Employment Grant. Claims will start to be made from the 17th August and will follow a similar format to the first grant. At the moment all we know is that if you successfully received the first grant you will be entitled to the second at 70% of your average monthly earnings for three months as long as you can provide evidence that you have continued to suffer detriment due to lockdown.

Unfortunately, as yet there has been no response to various petitions lobbying for support for the estimated three million people who have not qualified for any payments including the recently self employed and directors of limited companies.

Is £1k in January enough for a small business?

Yesterday the Chancellor Rishi Sunak announced that employers will receive £1k per employee they bring back from Furlough and retain until January 2021.

Now we have moved to the next phase of the Furlough scheme, with more financial expectation on employers, companies are making that difficult decision of when that most cost affective time is to bring people back to the business. However, for most small businesses footfall is slow, revenue is significantly down, consumer spending and confidence is at an all time low and the only option is looking at reducing overheads by starting a redundancy process.

So is £1K enough? Is the promise of one thousand pounds per person in 6 months time, if paid on time, enough to justify that expenditure now.

On the surface that seems like a great deal especially for buoyant and larger organisations with cash flow reserves, but how realistic is it for small businesses and those with cash flow concerns.

As with many government schemes of late (I hate to bring up the logistical nightmare that was GDPR!) the practical implications on small businesses is often not considered making this scheme potentially inaccessible and may not succeed in what it sets out to do in attempting to keep as many people as possible in employment.

In the budget announcement, many had the hope that we would all suddenly see an extra £500 pounds in our bank account for a bumper summer spending spree in August. Sadly that was not to be but I can’t help thinking that if it came with conditions of use including shopping local or supporting small business and food outlets, this would increase revenue and the ability to retain employees.

Chancellor announces update and extension to Furlough and Self Employment Grants

Although full details have not been published yet, Chancellor Rishi Sunak has released a statement outlining how details of the extension to the Furlough scheme and second payment for the self employed.

Key points are;

* No new claims for employees placed on furlough for the first time after June 10th
* Flexible furlough will start on the 1st July removing the minimum of 3 weeks before an employee can return to work and allowing part-time and job shares
* Employers will start paying NI and pension contributions from 1st August and no longer claim through CJRS
* On September 1st the amount of furlough changes to 70% and then 60% on October 1st. Employers will have to pay the remainder of the 80% but can choose to add the final 20% if they can
* The Furlough scheme will end on October 31st 2020

* The self employment grant will make a second payment of 70% of your average earnings up to £6,750 in August. You will only be eligible if you have successfully received the first payment

We will update as soon as more information is published with full links…..

Furlough scheme to be extended to the end of October

Rishi Sunak has announced that the current furlough scheme will be extended until the end of October 2020. Nothing will change to the scheme until the end of July but from August there will be more flexibility with part time working / furlough possibilities.

Full details of how these changes will work are not being announced until the end of May however this does give some reassurances that employers and employees were looking for past June.

Governments Covid-19 Recovery Strategy released

The government has released the follow up document to Boris Johnsons’ statement last night. It is intended to clarify details relating to the gradual return to life in a post Covid-19 world. However, there are still many questions unanswered.

There is a small section in Chapter 4 relating to guidance of returning to work which can be summarised as;

– continue to work from home if you can,
– if you can’t, go to work if you are allowed under Covid-19 restrictions and your place of work is open but not via public transport where possible,
– employers should ensure that they are following the “Covid-19 Secure” guidelines (Chapter 3) which are not being released until later this week.

Separate details have been released through the media that non-medical face coverings should be worn on public transport and in enclosed places of work and shops where social distancing may be difficult.

The full document is below followed by some FAQs….

New online check to see if you are eligable for the Self-Employment Income Support Scheme has now launched an online checking system to see if you are eligable for a payment through the Self-Employment Income Support Scheme.

By logging on to the link below, you will be asked for your Unique Tax Reference, or UTR, from your last tax return, your National Insurance number and if successful your gateway portal reference and password.

You will then be able to make a claim from 8am on the 13th May 2020 with a payment to be made by early June although as yet there no confirmation of a date.

Important qualification date change for Furloughed employees

Today (15th April 2020) HMRC has announced another edition around the Coronavirus Job Retention Scheme. Most are small clarifications however one that will make a big impact is that the qualifying date for employees has now been changed to the 19th March 2020 from the 28th February 2020 to bring it in line with when the initial announcement was made.

This is to ensure a large number of people do now qualify for the scheme who had previously been left with nothing.

To clarify this now means that you must have been working for your employer prior to the 19th March 2020 to now qualify. If you have been made redundant or let go due to previously not qualifying, get in touch with your employer as they can re-instate you and back date your furlough pay, however it would expected for there to be written evidence of prior employment to prevent companies taking advantage of the system with “ghost” employees.

Employers an still back date their claims to the 1st of March 2020.