June 2, 2020
by  Pradeepan Velayuthan

Coronavirus Job Retention Scheme & Self-Employment Income Support Scheme - Extension

On 29 May 2020, the government extended the Coronavirus Job Retention Scheme (CJRS). 

Furloughed Employees can now work part-time

Employees that have been furloughed due to COVID-19 will be able to have a flexible employment from the 1 July 2020. Employers will have the flexibility to allow their furloughed employees to work part time. Despite this change, the government will continue paying 80% of salaries of their normal hours that they have not worked until the end of August. 

The employer has control on the employment hours and the employer will be responsible for paying the full wage to their employee. There are no set requirements of the number of hours that an employee must work, this will vary depending on your business requirement. 

What must be done?

This new working arrangement between an employee and employer must be confirmed in writing. This agreement with an employee must cover at least one week and reported and claimed when the employer claims for the CJRS grant. You can make claims every fortnight or month, but you will be required to submit both the standard hours of the employee and the actual hours worked.

 If you have an employee who is unable to work or you do not have work to provide them, the employee can remain as furloughed and you can claim the grant under the current conditions.

Employer Contributions

There are a few changes that will change over the upcoming months regarding employer contributions.

June/July:

  • The government will pay 80% of wages up to a maximum of £2,500
  • Employer National Insurance and Pension Contributions will be covered for the hours not worked by the employee.
  • Employers will have to pay employees for the hours they have worked.

August:

  • The government will pay 80% of wages up to a maximum of £2,500
  • Employers will have to pay for Employers National Insurance and Pensions Contributions

September:

  • The government will pay 70% of wages, up to a maximum of £2,187.50 of the hours the employee does not work
  • Employers will be required to pay the 10% of wages to make up 80% of the total up to a maximum of £2,500
  • Employers pay National Insurance and Pension Contributions

October:

  • The government will pay 60% of wages, up to a maximum of £1,875 of the hours the employee does not work
  • Employers will be required to pay the 20% of wages to make up 80% of the total up to a maximum of £2,500
  • Employers pay National Insurance and Pension Contributions

If you are a smaller employer, some or most of your national insurance costs will be covered by the Employment Allowance.

CJRS – New Furloughed Employees

The Coronavirus Job Retention Scheme will close to new individuals who wish to be furloughed from 30 June 2020.

  • From 30 June, you will only be able to furlough employees who have been furloughed for a full three weeks prior to 30 June
  • The deadline for newly furloughed employees is 10 June to fit the three-week criteria

How to Claim?

Go to GOV.UK and search for Coronavirus Job Retention Scheme. Everything you need to know about this scheme is on GOV.UK

Self-Employment Income Support Scheme (SEISS)

  • The Self-Employment Income Support (SEISS) has also been extended similarly to CJRS.
  • Self-employed individuals who are eligible will be able to claim a SEISS grant in August.
  • The scheme will be targeting towards individuals who have been affected severely by COVID-19 and the criteria will be the identical as the initial grant.
  • To be eligible for the second grant, you do not have to claim the first claim.
  • The taxable grant will be 70% of your average monthly profits for three months. This will be a maximum of £6,570 and paid in one instalment.
  • On 13 May 2020, the first SEISS was introduced and the deadline to claim this falls on 13 July 2020.

How to Claim?

The eligible self-employed individual must make this claim themselves. HMRC will then calculate the grant you will receive

More information regarding the second grant will be available on 12 June but in the meanwhile, GOV.UK has the most recent and regular information regarding this scheme.

https://www.gov.uk/government/organisations/hm-revenue-customs

On 26 March 2020, the government introduced a new scheme called Self Employed Income Support Scheme (SEISS) to provide aid for individuals who are self-employed. A member of partnership can also claim this scheme. The scheme is now open to those who have been impacted by COVID-19 and have annual profits of less than £50,000. Half of their income should also be obtained from self-employment.

If the conditions are met, the SEISS will provide a grant value:

  • 80% of the average monthly trading profits
  • Capped at a total of £7,500
  • For a duration of three months

The scheme may be prolonged if circumstances change.

Who do I Contact?

HMRC will contact you directly if you are eligible for the scheme. From the 4 May 2020, HMRC have been contacting individuals who are eligible for SEISS and you will be asked to claim online using the GOV.UK Online Service.

HMRC will calculate how much an individual can claim and then you will have to make the claim to receive the fund.

You can go online to check if you are eligible for this scheme by clicking here.

You will need the following to check if you are eligible:

  • Unique TaxPayer Reference (UTR)
  • National Insurance Number

Am I Eligible for SEISS?

You must be either self-employed or a member of a partnership

  • You carry on a trade that has been impacted by COVID-19
  • You have traded in the Tax Years 2018-19 and 2019-20
  • Your Self-Assessment Return for the Tax Year 2018-19 has been filed on or before 23 April 2020
  • You expect to remain trading in the Tax Year 2020-21
  • You meet the profit criteria

The profits criteria are met if:

  1. For the Tax Year 2018-19, your trading profits were:
  • 0 < Profit < £50,000 and
  • At least equalising to your non-trading income for the same tax year

2. You traded in each of tax years 2016-17, 2017-18 and 2018-19 and:

  • 0 < Average profits for the years < £50,000 and
  • The total profit was at least equal to your non-trading income for those years

3. You traded in the Tax Year 2017-18 and 2018-19 and not 2016-17 and:

  • 0 < Average profit for the two tax years < £50,000 and
  • The total profit was at least equal to your non-trading income for those two tax years

Who is not eligible?

  • If you started your trade after 5 April 2019
  • Your Self-Assessment Return for the Tax Year 2018-19 has not been submitted by 23 April 2020
  • If your trading income is less than half of your overall income
  • You operate a Furnished Holiday Letting business

How Do I Claim if I am Eligible?

The online claim scheme is expected to open on 13 May 2020 however, an alternative method will be provided for those who cannot claim online.

You will be using the GOV.UK online service to make complete this claim, and you will need the following:

  • Your Unique Taxpayer reference (UTR)
  • Your National Insurance Number
  • Your Government Gateway user ID and password
  • The details of the bank account you want the grant to be paid into

Frequently Asked Questions

Can we make your claim for you?

  • Unfortunately, we cannot. As agents we can only assist you to check if you meet the criteria of this scheme, however, the claim must be completed by you.

How long do I have to wait for the claim to be approved?

  • As you file the claim, you will be told straight away if the claim has been approved. You will be notified how much you are eligible for and how this has been calculated.

How long do I have to wait for the payment?

  • Once approved, the payment will be made to the bank account you have provided within six working days as a single instalment.

What do I need to do after the claim?

  • Please ensure that you keep a clear record on the amount being claimed, reference number and any evidence that shows your business has been impacted by Coronavirus

Am I eligible if I have more than one income stream?

  • If your trading income accounts for half or more of your overall income, you are eligible.

I do not have a Government Gateway Account, what do I do?

  • Please click here to set up your government gateway account.

Please contact us for further information.

How does Statutory Sick Pay (SSP) work for Coronavirus?

Coronavirus has become a pandemic it is becoming a growing concern for the world. The UK government have set a guidance on Coronavirus (Covid-19), but we are here to answer a few questions that you might have.

The UK 2020 budget has been set and there have been a few changes, this includes a temporary change to the Statutory Sick Pay (SSP).

Should I self-isolate?

If you believe you have symptoms of COVID-19, even mild, please stay at home and do not leave your house for 7 days. From the 13th of March 2020, individuals who have been advised to self-isolate will be covered by SSP.

What is the current rate for SSP?

The current rate is £94.25 each week but this increases to £95.85 from the 6th April 2020.

How does SSP work?

SSP will be payable from the first day rather than the fourth day for affected individuals. This includes individuals who are not ill but unable to work due to self-isolation.

Do I need a sick note to be eligible for SSP?

You do not need a note from your GP or Doctors regarding COVID-19. Instead, you’ll be able to obtain one from NHS 111 if you require a note.

What happens if I am not eligible for SSP?

If you are an individual who is not eligible for SSP, for example if you are self employed or someone earning below the lower earning limit (£118 per week or £512 per month), you can make a claim for Universal Credit or Contributory Employment and Support Allowance.

Information regarding SSP for Employers

If you are a small or medium sized business or employer (less than 250 employees), the government intend to fund your extra costs related to Covid-19 SSP. This includes refunds for business who have employees who have claimed SSP due to Covid-19. Employers are still asked to record absences. However, there is no need to obtain a GP or Doctors fit note, instead one can be obtained from NHS 111.

If you require more information, please click here

Have you filed your Self-Assessment?

Probably you are tired of hearing “Have you filed your Self-Assessment” on radio, TV, Newspapers and on the Tube!. Yes, the deadline for filing your Self-Assessment for tax year 2018/19 is 31st of January 2020.

Who should file a Self-Assessment?

Anyone who has received untaxed income from any source will have to file a self-assessment and pay the relevant taxes. Examples below:

  • Self Employed Sole trader
  • Anyone receiving Property Income
  • Anyone receiving Dividend income
  • Anyone receiving Bank interest
  • Anyone have any other investment income
  • Anyone earning over £100,000 salaries
  • Anyone earning over £50,000 and receiving Child Benefit
  • Anyone who has disposed a chargeable asset (Capital Gains Tax payable)
  • And the list goes on

Self Assessment is not always paying more taxes to HMRC. There are instances where you will actually get a refund from HMRC if you have overpaid Taxes:

  • If you have suffered CIS deductions (Your main contractor has deducted CIS from your pay)
  • If you have two jobs and paid more taxes due to a wrong tax code
  • If you have made a trade loss which could have been set off against your other income
  • If you have made an EIS or SEIS investment.
  • If you have incurred employment-related expenses which are not reimbursed by your employer etc

What will happen if I don’t file a Self-Assessment?

  • If you don’t file your Self Assessment on time ( for 2018/19 returns - paper returns by 31st of October 2019 and online returns by 31.01.2020), you will get a penalty of £100.
  • If the return is not filed after 3 months of the deadline, HMRC will impose a penalty of £10 per day for the next three month up to a maximum of £900.00
  • If you are late by 6 months, you will pay an additional 5% of the Tax due or £300, whichever is greater.
  • If you are late by 12 months, you will pay further 5% of the Tax due or £300, whichever is greater.

What if I don’t pay on time?

  • If you have not paid the tax  due within 30 days of the payment due date you will be charged 5% of the taxes due
  • If you have not paid the tax within 6 months from the payment deadline, a further 5% penalty will be applicable
  • And if you are 12 months late, another 5% will be charged on the tax due.

** Please note the late filing penalties and late payment penalties are independent to each other and you may be liable to pay both the penalties.

** If you are missing information, you can always make estimates and notify in the tax return that you have made estimates.

** You can also amend your tax return online within 12 months of your online filing deadline.

If you would like to discuss your self Assessment with us, please contact us and an expert in our team will be happy to assist you.

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