Lockdown 2.0 – November 2020
Furlough extension, increase in help for the self employed and financial aid for businesses forced to close. These are some of the measures HMRC has introduced to support businesses financially during the upcoming lockdown period.
Furlough Extension – CJRS
The Coronavirus Job Retention Scheme, or furlough, was due to end on 31 October. It has now been extended.
The UK government will pay 80% of wages for the hours furloughed employees not worked, up to a cap of £2,500 for periods from 1 November.
Employers will pay employer National Insurance and pension contributions. You can choose to top up your furloughed employees’ wages beyond the 80% paid by the UK government for hours not worked, but you are not required to do so.
This furlough extension will follow on directly from the scheme that has been in place.
How will it work?
Employees can be fully or partially furloughed. Employers will have to cover their wages for any hours they work as well as all employer National Insurance and pension contributions.
You will be able to claim either shortly before, during or after running your payroll. There will be a short period initially when the online claims service will be closed while the system is updated, claims can be made in arrears for that period.
Further details will be provided in the next few days.
You can claim for employees who were on your PAYE payroll on 30th October 2020. You must have made a PAYE Real Time Information (RTI) submission to HMRC between 20th March 2020 and 30th October 2020, notifying a payment of earnings for that employee.
Employees on the payroll on 23rd September 2020 (i.e. notified to HMRC on an RTI submission on or before 23rdSeptember) and were made redundant or stopped working for you afterwards, they can also qualify for the scheme if you re-employ them.
You can furlough an employee for the first time. Further details on eligibility will be provided in the next few days.
- Check Eligibility
- Agree working hours with your employees. Partial and full furlough are allowed.
- Keep the records that support the amount of CJRS grant you claim, in case HMRC need to check it.
The Job Support Scheme
Has been postponed until further notice.
Self Employed Income Support Scheme
Only those that are currently eligible for the scheme will be able to access this grant extension. This self-employed person must still be trading actively and the demand for their trade has decreased as a result of COVID-19.
The grant will be issued as two taxable grants.
INCREASED AGAIN – For November to January covering 55% of average monthly trading profits. 80% for November and 40% for December and January. Paid in a single instalment covering 3 months’ worth of instalments. Capped at £5,160.
This grant will be open from 30th November 2020.
For February to April. The value of this grant is currently unknown. The government will continue to assess the situation and determine the level of the second grant at a later date.
The scheme has been extended, for another 6 months, to April 2021.
Following the weekends announcements, HMRC confirmed that these grants will also increase.
The following sectors, adversely impacted by the restrictions that lockdown causes, there is a cash grant of up to £3,000 per month. The grants are being distributed retrospectively.
Local authorities will be able to distribute grants, to businesses legally forced to close, of the following rateable property values;
- Less than £15k – Grant = £1,334 per month
- £15k- £51k – Grant = £2,000 per month
- More than £51k – Grant = £3,000 per month
Work From Home Tax Relief
Don’t forget to apply for your work from home tax relief. It takes about 5-10 minutes to do. You will need:
- To set up a government Gateway account (if you don’t already have one)
- Date you began working from home
- 2 Forms of ID – Payslip/P60, Passport/Drivers licence
HMRC will then issue you with a new tax code to receive this tax relief. Be sure to make payroll aware of your new tax code.
At Big Hand, we offer our business expertise to those who need it. From accounting queries to doing tax the right way, we can handle all of your requests. To find out more – or simply just pick our brains – get in touch on 0161 327 2911.