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10 November 2020

Job Furlough Support Scheme – Extended

Tax Tips – Business Question:

I am self-employed with a number of employees and over the Halloween weekend, I understand that the Chancellor has made yet more changes to the Job Support Scheme which was due to commence in November?

‘With the Job Support Scheme (JSS) announcements having been issued just one day before the extension of the Coronavirus Job Retention Scheme (CJRS) many business owners and employees are very confused over the current state of play,’ says Paddy Harty

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Although unexpected, the CJRS extension is a welcome reaction to the new lockdown restrictions which were introduced at the Halloween weekend by the Prime Minister.  The CJRS has now been extended and will run until at least Wednesday 2 December 2020 which is the date that the recently enforced England wide lockdown is due to come to an end.  The Chancellor has announced that the Furlough payments will now be extended at the same previous level of support equivalent to 80% of wages for those people unable to work or unable to work their full hours as a result of the extended Coronavirus restrictions across the UK.

The new eligibility date is 30 October which will permit new entrants into the scheme and those currently on Furlough, that will remain on Furlough, can do so via their employer reapplying through the scheme.  The CJRS will pay businesses for wage costs and 80% can be claimed in respect of each Furloughed employee up to a ceiling of £2,500.  As per the existing CJRS scheme that ended 31 October 2020, employers must still maintain pension liabilities and PAYE and flexible furlough will be permitted.

To be eligible for the scheme, employers seeking to place employees on Furlough must have had those employees on a PAYE real-time information return by midnight on Friday 30 October 2020.

Employees can be on any type of contact and employers can claim the grant for the hours their employees are not working calculated by reference to their usual working hours in a claim period and therefore the calculations will follow the similar methodology currently used under the former CJRS.

You will need to report the hours worked and the usual hours that any employee you place on the CJRS would be expected to work within a claim period and you will need to report and claim for a minimum period of 7 consecutive calendar days.  For those hours worked, employees will be paid subject to their employment contract and you will be responsible, as their employer, for paying the tax and national insurance due on the amounts.

Turning to your own situation, as a self employed business person, the Chancellor also announced at the Halloween weekend, increased support for self employed.  You will be aware that Phase 2 of the Self Employed Income Support Scheme (SEISS) closed on 19 October and a third phase runs from 1 November 2020 until 30 April 2021 in two stages from November to January and from February until April.  The level of support has now been increased to 80% of average trading profits for the month of November which would increase the total grant for the 3 months until the end of January up to 55% of trading profits as opposed to 40% previously offered.  This increases the maximum grant from £3,750 up to £5,160.

The advice in this column is specific to the facts surrounding the questions posed.  Neither FPM nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.

Contact Paddy

Paddy Harty / Senior Tax Director

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