SEISS and CJRS Updates

The Government’s second Self-Employment Income Support Scheme grant is now open for eligible claims. There have also been changes to the Coronavirus Job Retention Scheme this month. Full details are set out below.

Self-Employment Income Support Scheme (SEISS)

Applications for the second grant opened on 17 August 2020 and will close on 19 October 2020.

This is the second and final taxable grant under the scheme and eligible individuals are able to claim a grant worth 70 per cent of their average monthly trading profits. This will be paid out in a single instalment covering three months’ worth of profit and capped at £6,570 in total.

An individual does not need to have claimed the first grant in order to be eligible for the second and final grant.

Eligibility

To avail of this support you must:

  • Be a self-employed individual or a member of a partnership;
  • Have submitted your 2018-19 self-assessment income tax return;
  • Have traded in the 2019-20 tax year;
  • Be trading at the time of applying (or you would have been except for coronavirus);
  • Intend to continue trading in the 2020-21 tax year; and
  • Have been adversely affected due to coronavirus on or after 14 July 2020

In addition, you must satisfy one of the following conditions:

  • You have trading profits in 2018-19 of less than £50k and these profits constitute more than half of your total taxable income; or
  • You have average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50k and these profits constitute more than half of your average taxable income in the same period

Examples of how you could have been adversely affected include:

  • Being unable to work because you are shielding, self-isolating, on sick leave because of coronavirus, or have caring responsibilities because of coronavirus;
  • Having to scale down, temporarily stop trading or incur additional costs because your supply chain has been interrupted, you have fewer or no customers or clients, your staff are unable to come in to work, one or more of your contracts have been cancelled, you had to buy protective equipment so you could trade following social distancing rules.

Further guidance to help you decide if you have been adversely affected can be found at https://www.gov.uk/guidance/decide-if-your-business-has-been-adversely-affected-for-the-self-employment-income-support-scheme

Overpayments or ineligible grants

You should keep evidence to confirm your business was adversely affected at the time you made your claim. This could include:

  • Accounts showing a reduction in turnover;
  • Dates of business closure due to lockdown restrictions;
  • Dates that you or staff members were unable to work due to shielding, symptoms, or caring responsibilities due to school closures.

If you think you were not eligible for the grant or have been overpaid you need to tell HMRC and pay back the grant. If you received a SEISS grant before 22 July 2020 you must tell HMRC on or before 20 October 2020; or if you received a SEISS grant on or after 22 July 2020 you must tell HMRC within 90 days of receiving the grant.

If you do not you may have to pay a penalty.

Coronavirus Job Retention Scheme (CJRS)

The rules of this scheme changed on 1 July. From that date employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim the grant for their normal hours not worked.

Unless you’re making a new claim for an employee who is a military reservist or is returning from statutory parental leave, you can only continue to claim through the scheme if:

  • you have previously furloughed the employee for 3 consecutive weeks between 1 March and 30 June; and
  • you submitted your claim before 31 July.

The amount you can claim for in any single claim period cannot now exceed the maximum number of employees you claimed for under any claim ending by 30 June.

For example, an employer previously submitted 4 separate claims between March and June, one for 10 employees, one for 15 employees, one for 20 employees and one for 30 employees. The maximum number of employees the employer can furlough in any single claim starting on or after 1 July is 30.

In another example, an employer has 50 employees and previously submitted claims between March and June for all of these employees, but not all at the same time. The employer put all 50 employees on furlough and rotated them every three weeks, with a maximum of 25 employees on furlough at any one time. The maximum number of employees that this employer can furlough in any single claim is 25, although all 50 employees are eligible for furlough.

Reduction in Grants

From 1 August 2020, Employers’ National Insurance and pensions contributions have to be paid from the employer’s own resources for all employees, whether furloughed or not.  The level of grant available will continue to gradually reduce until October:

  • August – 80% wage support up to £2,500 (no employer NIC or pension costs covered)
  • September – 70% wage support up to £2,187.50 (no employer NIC or pension costs covered)
  • October – 60% wage support up to £1,875 (no employer NIC or pension costs covered)

Full details of the scheme can be found at:-

https://www.gov.uk/government/collections/coronavirus-job-retention-scheme

Job Retention Bonus

The Job Retention Bonus is a one-off payment to employers of £1,000 for every employee who they previously claimed for under the Coronavirus Job Retention Scheme, and who remains continuously employed through to 31 January 2021. Eligible employees must earn at least £520 a month on average between the 1 November 2020 and 31 January 2021. Employers will be able to claim the Job Retention Bonus after they have filed PAYE for January and payments will be made to employers from February 2021.

Employers will be able to claim for employees who:

  • were furloughed and had a Coronavirus Job Retention Scheme claim submitted for them that meets all relevant eligibility criteria for the scheme;
  • have been continuously employed by the relevant employer from the time of the employer’s last claim for that employee until at least 31 January 2021;
  • have been paid an average of at least £520 a month between 1 November 2020 and 31 January 2021. The employee does not have to be paid £520 in each month, but must have received some earnings in each of the three calendar months that have been paid and reported to HMRC via RTI;
  • have up-to-date RTI records for the period to the end of January;
  • are not serving a contractual or statutory notice period, that started before 1 February 2021, for the employer making a claim.

Employers should ensure that they have complied with their obligations to pay and file PAYE accurately and on time under the Real Time Information (RTI) reporting system for all employees, and that their employee records are up-to-date. Employers should also make sure all of their Coronavirus Job Retention Scheme claims have been accurately submitted and any necessary amendments have been notified to HMRC.

More detail about this process will be published in guidance by the end of September 2020.

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