Just because lockdown is easing and life is starting to return to normal, doesn’t mean businesses, entrepreneurs and sole traders are not still trying to find their feet.
We are fully aware that lots of you are still managing on tight budgets, reduced staff and experiencing a drop in sales – not to mention worrying about the impact of the recession we now find ourselves in.
With that in mind, it’s vital you stay abreast of the financial benefits you are entitled to as the furlough scheme and the self-employment income support scheme tail off.
So where are we at?
I’M AN EMPLOYER
There are many of you who have staff on furlough and will be aware that for August, the government will continue to pay 80% of employees’ wages, capped at £2,500.
However, from August, employers take back the responsibility of paying national insurance and pension contributions, representing 5% of employment costs.
Things ramp up a bit from September.
The government will begin to phase out the furlough scheme by decreasing payments by 10% and decreasing the maximum payment by £313.
Employers will then be able to claim 70% of employees’ wages, capped up to £2,187, representing 14% of employment costs.
From October 2020, the government will pay 60% of wages capped up to £1,875, a further decrease of £312, representing 13% of employment costs.
This means many of you will be starting to make decisions on whether to bring employees back to work (and there is another financial perk for this) or consider making redundancies.
The perks of re-employment
The Chancellor announced a new job retention bonus as part of its Plan for Jobs 2020 which said that employers who bring workers back from furlough and retain them in employment until the end of January 2021 will qualify for a £1,000 bonus.
Further guidance on the scheme was published on 31 July but if you have missed it, we are here to fill in the gaps.
In short, it makes it clear that bonuses will only be paid for employees that were eligible for the scheme and to qualify for the bonus, the employee would need to remain continuously employed through to the end of January 2021 and earn an average of £520 per month over that period.
The employee must have earned something during each of these months, and only earnings recorded through HMRC Real Time Information (RTI) records can be counted.
A bonus will not be paid for any employee who is serving a contractual or statutory notice period that started before 1 February 2021, even if they are still employed on 31 January.
As well as affecting employees who have been given notice of dismissal before this date, this means that an employer may lose out on the bonus if an employee resigns shortly before it would have become payable.
The bonus amount is the same for each employee irrespective of the employee’s actual wages.
It’s hoped the perk will make employers reconsider making redundancies and, if the bonus is not enough by itself to avoid redundancies, an employer may wish to use it in combination with temporary pay or hours reductions to make it work for everyone concerned.
I’M SELF EMPLOYED
Good news for you then.
The Self-Employment Income Support Scheme has been recently extended which means you will be able to claim the second grant.
Once again, we cannot do it for you. But once again, we are here to help you in any way we can.
What is it?
Chancellor Rishi Sunak introduced the Self-Employment Income Support Scheme in March to help keep people earning money during the coronavirus.
The grant initially covered 80 percent of a self-employed person’s monthly trading profits, capped at £7,500 covering a period of three months.
HMRC opened the scheme for applications in May, ahead of schedule, and the first grant covered the months of March, April and May.
Mr Sunak later announced self-employed people will be able to claim for a second and final grant from August.
The scheme has been extended to accept applications for the second grant until October 19, 2020.
The grant will be worth slightly less than the first grant, at 70 percent of average monthly trading profits over three months.
The second and final self-employed grant is capped at a total of £6,570.
What now?
As of August 17, you can apply for a second grant.
The online service to make a claim is now available, and HMRC state you should make your claim from the date they give you.
Those eligible will receive their final grant within six working days of making a claim.
The eligibility criteria remains the same as for the first grant, with people needing to have had trading profits of no more than £50,000, making up at least half of their total income.
How we can help
Unlike the furlough scheme, we can’t make applications for SEISS on your behalf. To apply visit https://www.gov.uk/guidance/claim-a-grant-through-the-self-employment-income-support-scheme
You will need your:
• Self Assessment Unique Taxpayer Reference (UTR) – if you do not have this find out how to get your lost UTR or call us and we will try to help
• National Insurance number – if you do not have this find out how to get your lost National Insurance number
• Government Gateway user ID and password – if you do not have a user ID, you can create one when you make your claim
• UK bank details (only provide bank account details where a Bacs payment can be accepted) including:
o bank account number
o sort code
o name on the account
o your address linked to your bank account
As always, we are on the end of a phone and willing to help in whatever way we can. Give us a call on 01394 617594.