An Update for Clients With Staff on Furlough

Today saw a few big changes with some children going back to school and many businesses beginning to start trading again

Covid-19 has taught us all a great deal about market volatility but also the strength that the internet and e-commerce can bring to a business. I have heard from many clients that you have successfully adapted to the changing circumstances with trading online, working from home and even producing and hosting online fitness classes.

Now is possibly the time for you to reassess your businesses strategy, plus consider if further capital could be of benefit to your long-term business growth plan. If this is the case, I would suggest that you revisit my previous email regarding the Government Bounce Back Loan scheme affording businesses the opportunity to borrow at a very low interest rate.

Update for clients with staff on furlough

From the 1st of July, under the Coronavirus Job Retention Scheme, you will be given the flexibility to bring furloughed employees back part time, a month earlier than previously announced.

However, claims from July onwards will be restricted to employers currently using the scheme and previously furloughed employees. The scheme will close to new entrants on 30 June, with the last three-week period for furloughing before that point commencing on 10 June.

Your business will decide the partial hours and shift patterns your employees will work on their return, and you will be responsible for paying their wages for the hours worked.

From August 2020, the level of government grant provided through the job retention scheme will be tapered, with employers’ contributions increasing, to reflect that people will be returning to work.

In June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (NICS) and pension contributions. You as Employer are not required to pay anything.

In August, government payments remain as before, but employers will be required to pay employer NICS and pension contributions.

In September, the government’s contribution to furlough wages will fall to 70%, up to a cap of £2,187.50. Employers will pay employers NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.

In October, the government furlough contribution falls to 60% of wages up to a cap of £1,875. Employers will pay employer NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.

You will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

Employees who believe they are not getting their 80% share can also report any concerns to the HMRC fraud hotline. HMRC will not hesitate to take action against those found to be abusing the scheme.

Update for Self Employed clients

Those clients eligible under the self-employment income support scheme (SEISS), will be able to claim a second and final grant in August.

The grant will be worth 70% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total.

Individuals can continue to apply for the first SEISS grant until 13 July. Applications for the second grant will open in August.

The eligibility criteria are the same for both grants, and individuals will need to confirm that their business has been adversely affected by coronavirus.

An individual does not need to have claimed the first grant to receive the second grant, for example in circumstances where they may only have been adversely affected by Covid-19 in this later phase. Further guidance on the second grant will be published on 12 June.

As lockdown begins to ease and businesses begin to reopen their doors to the new normal, I hope you remain positive and take a constructive view towards the way your business will move forward. I would encourage you to prepare for reopening your businesses by thinking about social distancing practises within the workplace and any further sanitary requirements you may need for your employees, customers and personal use.