Government extends furlough scheme and self-employment support
The Coronavirus Job Retention Scheme has been extended for a month following the Prime Minister’s plans for a four-week period of national restrictions
02 November 2020
The Government’s Coronavirus Job Retention Scheme (CJRS) has been extended for a month. This follows the announcement of new national restrictions that are set to begin from 5 November and last until at least December.
On 31 October, Prime Minister Boris Johnson announced the new restrictions, which advise the public to stay at home except in limited circumstances, such as for work, education, medical reasons and appointments, to shop for essentials and to exercise.
It is understood that practices will be able to remain open, with the College of Optometrists recommending that practices remain open for prioritised routine care, emergency and essential care, operating under Amber phase guidance.
The AOP has shared in an update its understanding that practices in England will be able to remain open to provide prioritised routine care, adding: “As part of the OFNC, we’re seeking urgent discussions with NHS England on the implications of the announcement on Saturday, including for ongoing funding support for practices.”
In line with the introduction of the new national restrictions, the Government has extended the furlough scheme, which was due to end on 1 November.
The scheme will now remain open until December in a more flexible form, which would allow employers to bring furloughed employees back to work on a part-time basis, or furlough them full-time.
Through the scheme, the Government will pay 80% of wages for hours not worked, up to a maximum of £2500. Businesses will be asked to cover National Insurance and employer pension contributions.
As a result of the extension, the Job Support Scheme, which was due to replace the furlough scheme from 1 November, has been postponed.
More details on how to claim the extended support is due to be released.
The Chancellor will also extend the deadline for applications to COVID loan schemes to the end of next month, the Prime Minister said in a statement to Commons on Monday 2 November.
The Government also announced that businesses in England required to close due to the restrictions will be eligible for certain grants under the Local Restrictions Support Grant. Mortgage holidays will also be extended.
The Self Employment Income Support Scheme (SEISS), meanwhile, has been extended and it will now be increased due to the new national restrictions.
The Government had previously confirmed a six-month extension to the scheme. The extension is set to provide support in the form of two grants, available for three-month periods covering November 2020 to January 2021 and February 2021 to April 2021.
In the initial announcement, the Government said it would provide a taxable grant covering 40% of average monthly trading profits, paid in a single instalment covering three months’ worth of profits and capped at £3750. This was “broadly the same level of support” as was being provided for employees through the Job Support Scheme, the Government indicated.
However, in light of the new four-week restrictions, Chancellor of the Exchequer, Rishi Sunak, has confirmed an increase to the support from 40% to 80% for November.
As the SEISS is calculated over three months, the Chancellor said this will increase the total grant from 40% to 55% of trading profits from November to January and the maximum grant will increase to £5160.
The claims window will also open earlier, at the end of November, rather than the middle of December.
Furlough scheme extension: who is eligible?
- All employers with a UK bank account and UK PAYE schemes can claim under the Coronavirus Job Retention Scheme (CJRS, or furlough)
- The business or employee do not need to have previously used the furlough scheme
- For employees to be eligible under the extended scheme, they must have been on an employer’s PAYE payroll before midnight on 30 October 2020
- Employees can be on any type of contract
- Employers can claim the grant for hours their employees are not working, calculated by reference to their usual hours worked in a claim period
- When claiming the CJRS for furloughed hours, employers will need to report and claim for a minimum period of seven consecutive calendar days
- Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period
- Employers will pay employer National Insurance Contributions and pension contributions, and should continue to pay the employee for hours worked in the usual way
The Government is due to confirm when claims can first be made during November. For more details on the scheme and eligibility, click here.
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OT endeavours to keep the most up-to-date news on our website and this information was correct when published. However, the situation regarding coronavirus (COVID-19) is rapidly evolving.
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