Co- Accounting

View Original

Coronavirus Support Update - 26 Oct

Damion Viney

The last week saw a flurry of announcements from Rishi Sunak in response to the fast evolving pandemic. We give you the latest round up here.

Job retention and Job support schemes

The Job Retention Scheme ends on 31st Oct with 30th Nov the last date that claims can be made. The scheme was tapered since July and the details of the scheme in October are set out in our previous blog here.

The Job Support Scheme starts immediately now that the Job Retention Scheme closes on 1st Nov. Since writing our last Coronavirus update the Chancellor has changed the details of the scheme.

The scheme now has two streams one general scheme for all businesses and the second for businesses who have been forced to close their premises as a result of Covid restrictions (eg Tier 3 restrictions).

General Scheme

The scheme has been made more generous with the financials as follows:

  • Employees must work at least 20% of their usual hours*

  • Assuming employees earn under £3,125 per month they will receive 73% of their normal wages

  • Employers only now need to pay 5% of a ‘reference salary’* of hours that are not worked by the employee up to a maximum of £125 per month

  • The Government now funds up 61.67% of hours not worked with a new maximum payment of £1,541.75 per month

*Usual Hours and Reference Salary - Usual Hours and Reference Salary have now been defined and set out in Section 5 of the full Government guidance here. Generally they are based on historic hours and salaries.

Business whose premises have had to close due to Covid Restrictions

The scheme is made more generous again for businesses forced to close due to Covid restrictions.

  • No requirement for employees to work

  • No employer contribution required

  • Government pays 66.67% of salary up to a maximum of £2,083.33 per month.

Eligibility Criteria

Eligibility criteria have not changed for small businesses with under 250 employees. All that is required is a PAYE scheme and a UK bank account. The scheme has also been extended to large businesses but here a financial impact test has been set out.

Other restrictions

  • Employees must not be on redundancy notice

  • Employees must have been on payroll before 23rd Sept

  • Employees do not need to have been on the previous Job Retention Scheme

  • Employees will be able to come on and off the scheme and do not need to work the same hours each week, but each period under the scheme must be at least one week

  • Employes NI and Pension Contributions remain payable by the employer

Making a Claim

Claims will open for November Salaries from 8th Dec. If Co- is running your payroll please inform us in good time before November payroll is run that you wish to place employees on the scheme.

The scheme runs until April 2021 with final claims being made in May.

Winners and losers

As with all these schemes there will be winners and losers. The biggest winners will be employees on salaries closest to the upper limit of £3,125 per month whose jobs are under threat.

Directors on nominal salaries remain at a great disadvantage since the ‘usual hours’ and ‘reference salary’ mean the support they will be eligible for will be small.

Job Retention Bonus

The scheme offers employers a £1,000 bonus for all employees who were on the Job Retention Scheme who have remained in post until 31st Jan, so long as:

  • The employee is paid a minimum of £1,560 through tax months 8, 9 and 10 (Nov - Jan)

The scheme will be available for claims from 15th Feb.

Self Employed Income Support scheme

Since our last Coronavirus Update, the Chancellor has also made the new rounds of this scheme more generous:

The grant for the period 1st Nov to 31st Jan will now be for 40% of profits (up from 20%), based on 2018-19 trading and capped at a total of £3,750.

The level of grant support available for the following period (31st Jan to 30th April 2021) has not been set.

We have not yet been provided a date when the next round of the scheme will open.

Business Grants

The Chancellor announced a further £1bn of grant funding for business to be distributed through local authorities. At time of writing we have not be able to find details of how this can be accessed.

We have also become aware of a number of new business grants available:

Other Support

It is also worth signposting a number of other resources that have been set up in response to Covid:

And finally

We remain committed to support you through this crisis. We will be setting out to speak to all our clients in November to review what support is available.