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COVID-19 advice and updates for SMEs and the self-employed

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COVID-19 personal finances advice and updates

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Good morning. Today we take a closer look at the recent furlough scheme changes, as well as the deadlines for the Self-Employment Income Support Scheme (SEISS).

SEISS deadlines

There is still time to apply for the first SEISS grant. This scheme is designed to help self-employed people whose income has been negatively affected by the coronavirus pandemic. If you are self-employed, earn more than 50% of your income from self-employment and your average trading profit is under £50,000 per year, you are likely to be eligible. The grant is worth 80% of your average trading profits for March to May, up to a maximum of £2,500 per month.

Our guide to claiming SEISS is here. You have until Monday 13 July to claim this first SEISS grant.

A second SEISS grant, worth 70% of trading profits (up to £2,190 per month), will cover the three months from June to August. Applications open during August. If you weren’t eligible for the first grant, you may qualify for the second grant.

Strangely, you will need to confirm that your business was adversely affected by coronavirus on or after 14 July (even though the grant appears to cover June to August).

So, if coronavirus had a negative impact on your business during June, but it has recovered by 14 July, you won’t qualify for the second grant. It all seems a bit illogical but, unfortunately, those are the rules.

Furlough scheme changes

We reported on upcoming changes to the furlough scheme at the beginning of this month. More details about the revised Coronavirus Job Retention Scheme have emerged since then, so it’s worth revisiting.

The key things you need to know are as follows.

  • Up to 30th June. The scheme remains unchanged, paying 80% of furloughed employees’ wage costs (up to a monthly maximum of £2,500). However, if you want to furlough employees after 1st July, they should have been furloughed for three weeks at least once before. The last date for furloughing someone for the first time was 10th June.
  • From 1st July. You can bring employees on and off furlough for the first time. Any working hours arrangement must cover at least one week. You must also confirm it in writing to your employee. Furlough claims must ‘usually’ be for a minimum of 7 days. You can still claim 80% of wage costs, including employer’s National Insurance and pension contributions.
  • From 1st August. The scheme still pays 80% of salary, but you will have to meet NI and pension contributions.
  • From 1st September. The scheme pays 70% of salary, up to a monthly limit of £2,190.
  • From 1st October. The government will now cover only 60% of salary, up to a monthly maximum of £1,875. The scheme ends on 31st

Maximum number of employees you can claim for

It’s important to know the maximum number of employees you can claim for. Normally, this must not exceed the highest number of employees in any claim up to and including 30th June.

However, there are exceptions. The following employees can be added to your furlough claim after 1st July:

  • Staff returning from parental leave who had not been furloughed before.
  • Armed forces reservists returning to work from active service after 30th
  • People who have been moved to a new PAYE scheme after a scheme reorganisation after 10th June, but who had been furloughed under the original PAYE scheme between 1st March and 30th
  • Employees transferred under TUPE rules after 10th June, but who had been furloughed under their original PAYE scheme between 1st March and 30th

What else do I need to know about furlough scheme changes?

If you are going to continue to furlough employees, there’s quite a lot of admin you need to grapple with. This is especially true if you are going to bring them on and off furlough.

We will be publishing a blog post next week on how to make furlough claims after 1st July, but as a ‘heads up’ you’ll need to understand:

  • What to include when calculating wages
  • How to calculate an employee’s ‘usual’ hours – using both ‘fixed’ and ‘variable’ methods
  • How to calculate average hours worked
  • What records you need to keep – including furlough agreements, claim reference numbers, the calculations you have made and details of the hours employees usually and actually worked.

It’s going to be a detailed post, but we are keen to help you get to grips with the furlough scheme changes. You can find full government guidance here. In the meantime, if you’d like any help or advice on the furlough scheme, please get in touch with your account manager here at THP.

Avatar for Jon Pryse-Jones
About Jon Pryse-Jones

Since joining THP in 1978, Jon Pryse-Jones has been hands on with every area of the business. Now specialising in strategy, business planning, and marketing, Jon remains at the forefront of the growth and development at THP.

An ideas man, Jon enjoys getting the most out of all situations, “I act as a catalyst for creative people and encourage them to think outside the box,” he says, “and I’m not afraid of being confrontational. It often leads to a better result for THP and its clients.”

Jon’s appreciation for THP extends to his fellow team members and the board.  “They really know how to run a successful business,” he says.  He’s keen on IT and systems development as critical to success, and he continues to guide THP to be at the cutting edge and effective.

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