Changes to the self employed income support scheme and job retention scheme

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Changes to the self employed income support scheme and job retention scheme

Changes to the self-employed income support scheme and job retention scheme have been announced. NetworkIN Stafford brunch advocate Aaron Taft of Carthy Accountants in Stafford shares the update.

Tonight the Chancellor has announced changes to the current support available to employers and the self-employed.

For the self-employed, the ‘Self Employed Income Support Scheme’ (SEISS) will now be extended to 31 August 2020. It will work in the same way as the first grant and will cover a 3 month period based on average profits for the same years as before. The only change to this scheme will be that it will be 70% of these profits rather than 80%. It will also be capped at £6,570. The application for this scheme will open at the beginning of August, and the application will be as before.

With regards to the Coronavirus Job Retention Scheme (CJRS), the following change were announced and these changes will take place over the coming months.

The starting point for these changes will begin from 1st July. The new scheme will no longer accept new furlough applications for existing non-furloughed employees. This means the last date to furlough a current working employee would be 10 June 2020, in order to meet the current minimum 3 week furlough period.

From 1st July employers will be able to offer flexible options to their furloughed workforce to come back to work part-time. For example, an employee could work for 2 days a week and then be furloughed for the other 3 working days. The employer would pay full pay for the 2 days worked, and the 3 days would fall under the furlough claim.

Bringing in this flexibility means that employers will now be expected to contribute to the cost of furloughing their employees. Employees will still be entitled to 80% of their previous earnings as before, but this will be met with a combination of government grants and employer contributions. A breakdown of this is detailed below:

 

Contribution Breakdown

Up to 31 July 2020

CJRS will cover: 80% of relevant earnings, plus full associated Employer NI and Pension contributions
Employer will cover: No additional costs

1-31 August 2020

CJRS will cover: 80% of relevant earnings full associated Employer
Employer will cover: NI and Pension contributions

1-30 September 2020

CJRS will cover: 70% of relevant earnings 10% of relevant earnings, plus full associated
Employer will cover: Employer NI and Pension contributions

1–31 October 2020

CJRS will cover: 60% of relevant earnings 20% of relevant earnings, plus full associated
Employer will cover: Employer NI and Pension contributions

The scheme will close on 31 October 2020.

 

The follow-up questions from the announcement prompted the Chancellor to confirm there are no intentions to extend either the SEISS past 31 August 2020 or the CJRS past 31 October 2020.

The team at Carthy Accountants are happy to discuss these areas with you individually if you contact the team on 01785 248939 or email [email protected]

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