What was Job Retention Scheme (Furlough) that ran from March - end of Oct?
Job Retention Scheme (furlough): all UK employers were able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.
- For the first few months HMRC were reimbursing 80% of ‘furloughed’ workers wage costs, up to a cap of £2,500 per month.
- July: the flexible furlough adjustment started from 1st July, where employees could return to work part time. The employer decided what worked best for their business. An example: if a full-time employee was allowed to return to work 2 days a week, the employer paid 100% of the wages for those 2 days, and the furlough scheme covered the remaining 3 days at 80% rate (cap £2,500)
- August: the employer was expected to cover National Insurance and Pension Contributions (average claim is the equivalent to 5%), the government paid the remainder to make up to the 80%
- September: the employer was expected to pay 10%, the government paid 70% (up to £2,190)
- October: the employer was expected to pay 20%, the government paid 60% (up to £1,875)
- This scheme was due to close at the end of October, but it has been extended (with updated criteria) until December - see other question on the amended system.
- The cut-off date for being on the pay roll was originally 28th Feb and got extended to 19th March. However, if you were paid monthly and your new job started on 1st March 2020, the employer may not have sent the ‘Real Time Information’ to HMRC, which can sometimes be done a week before pay day. This could mean you might not have been registered with HMRC by the 19th March cut-off date.
- the first version of the furlough scheme closed to new applications on 30th June - employers wanting to place new employees on the scheme need to have done so by 10th June
- If you were on maternity pay and got furloughed, they would have used the salary you were on prior to going onto maternity leave. If you were on maternity/paternity leave prior to the outbreak and were due to return to work, it was possible to still be put on furlough, as the deadline date wouldn't have applied.
What is the extended Job Retention Scheme (Furlough) in November 2020?
The Job Retention Scheme (Furlough) was due to finish on 31st October, but the government announced on 5th November that it has been extended (with updated criteria) until the end of March due to the national lockdown in England, commencing on 5th November. Pubs, restaurants, gyms and non-essential shops will have to close for a month.
Businesses have flexibility to either bring furloughed employees back to work on a part-time basis or furlough them full-time. The employer will need to cover National Insurance and Pension contributions (on average it's approx 5%) and the government will cover 80% of the wages of employees' hours not worked (up to £2,500 max). The government will review the policy in January to decide on whether the employer will be expected to contribute more.
- it is ultimately the employer's decision whether to furlough a member of staff
- they must declare that they intend to continue to trade and either that Covid has reduced demand, or it means that they can't trade temporarily
- employees need to be on the payroll by 30th October
- you don't need to have been furloughed before to qualify
- if you have recently been made redundant, since 23rd September, you could ask to be rehired and be re-furloughed, as long as you were on the payroll between 20th March - 23rd September.
What is the new Job Support Scheme?
The Furlough (Job Retention Scheme) was due to finish at the end of October, but it has been extended (with updated criteria) until March 2021 due to the national lockdown in England starting on 5th November. The Job Support Scheme was meant to commence on 1st November and run for 6 months, but it has since been superseded by the extension of the existing Job Retention Scheme (furlough).
I am self-employed. What is Self-Employed Income Support (Grant 1 & Grant 2)?
Self-employed Income Support Scheme:
- a non-repayable grant (which is taxable) 80% of profits, up to £2,500 a month (£7,500 in total)
- the profits will be averaged over 3 years up to April 2019, it won’t take savings into account
- you will be contacted the second week in May by letter/email/text (check it's not a scam)
- applications opened 13th May but closed on 13th July, so you can no longer apply for Grant 1
- you should get paid 6 working days after the appointment slot
- it covers March, April, May and will be backdated
- you were allowed to keep working as long as you conformed to social distancing
- if you work for an employer and are also self-employed, if over 50% of your earnings is from self-employment, you would apply to this scheme. You might also be able to apply for the Furlough scheme, as they are not linked
- if you are on PAYE, apply for the Furlough scheme via your employer.
- the scheme has been extended to cover June, July, August
- but this time it only covers 70% of average monthly profits for 3 months (cap £6,570)
- applications will open from 17th August to make a claim - HMRC will contact you
- they estimate the payments would be made by the end of August
- you will need to confirm that your business was adversely affected on/after 14th July. This may be a reflection of the easing of lockdown measures. If your business is back up and running on 14th July, you might only be covered for June and part of July.
Any late tax returns for 2018/19 were extended to 23rd April – this needed to have been done in order to qualify for the scheme listed above. Your July self-assessment tax payment can be delayed by 6 months.
If you are self-employed and receiving Universal Credit and you have COVID-19 or are advised to self-isolate, the requirements of the Minimum Income Floor will be temporarily relaxed. This change took effect on 13 March 2020, and will last for the duration of the outbreak, to ensure that self-employed UC claimants will receive support. Savings are counted when calculating eligibility, but if you can prove that you have set aside money for paying your tax (do this via your Universal Credit log book), it won’t count towards your benefit calculation.
Deferring VAT and Income Tax payments: the government will support businesses by deferring Valued Added Tax (VAT) payments for 3 months (applies from 20th March 2020 until 30th June 2020). This is an automatic offer with no applications required.
If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
I am self-employed. What is Self-Employed Income Support (Grant 3 & Grant 4)?
The Self-employed Income Support (SESI) grant has been extended.
- For self-employed who have been affected by Covid between 1st November 2020 - 31st January 2021
- One-off full payment of 80% of average profits for 3 months, capped at £7,500 (the government updated the amounts on 5th November)
- Applications open on 30th November, the grant will cover 3 months, it usually gets paid within a few days
- Mostly it's the same eligibility criteria as the previous grants, except for this time, you need to prove there is a demand decrease due to Covid
- Unfortunately if you weren't eligible before (business not running long enough) you're still not eligible
If you are self-employed and receiving Universal Credit, the requirements of the Minimum Income Floor will be temporarily relaxed. This has been extended until April 2021, to ensure that self-employed UC claimants will receive support. Savings are counted when calculating eligibility, but if you can prove that you have set aside money for paying your tax (do this via your Universal Credit log book), it won’t count towards your benefit calculation.
Self-assessment tax due in January 2021 can be spread over the tax year. It includes the tax payment that was deferred until July 2020. It can now be done via 'Time to Pay' across 2021 with no interest added.
- For self-employed who have been affected by Covid between 1st February - 30th April 2021
- No details as yet...
What income is the government using for zero hour contracts?
It would be taken from the pay roll you were on, as of 28th February. For those with an irregular income working on PAYE, they would use the higher amount of either:
- what you earned in the same month last year (e.g. March 2019) if with the same employer; or
- take the average monthly income made over the last 12 months (April 2019 – April 2020). If you haven’t worked there for 12 months, they would average the monthly income over less time.
If the monthly comparison figure is higher, they would use that. If the average figure calculation is higher, they would use that.
How do I get evidence for my employer that I can't go into work?
By law, medical evidence is not required for the first 7 days of sickness. After 7 days, employers may use their discretion around the need for medical evidence if an employee is staying at home.
The government has strongly suggested that employers use their discretion around the need for medical evidence for a period of absence where an employee is advised to stay at home either as they are unwell themselves, or live with someone who is, in accordance with the public health advice issued by the government.
If evidence is required to cover self-isolation or household isolation beyond the first 7 days of absence then employees can get an isolation note from NHS 111 online (111.nhs.uk/isolation-note/) or from the NHS website (www.nhs.uk/conditions/coronavirus-covid-19/self-isolation-advice/).
How can I continue to work to supplement my income?
Non-essentail shops were allowed to open, if they were Covid-safe, from 15th June. The hospitality industry re-opened in July. If you are fit and well and want to work, it may be beneficial to think about how employment is changing in the short term for the foreseeable future. There are some companies that have remained open throughout and are being stretched to capacity. Even if they are fully staffed, they may need to take on additional temporary staff to cover sickness or their current staff who are self-isolating, for example:
- pharmacies that may need to organise deliveries of medication
- online delivery services
- postal services
- any shops/ services that are open
- food production companies
- fruit and veg picking scheme 'Pick for Britain', click here for more information
- outlets that are still allowed to provide a takeaway option
However, please ensure that you are not putting your own health, or others at risk. If you can find any employment that can be done by working from home, that would be ideal.
You could also try searching on the following sites:
What is the new business grant for those affected by the higher alert levels?
On 22nd October the Chancellor announced a new business grant, mainly for hospitality/ leisure/ accommodation sectors in high-alert level areas, to help them stay afloat and protect jobs if they are adversely affected by the latest government restrictions, even if they can remain open. The grant is up to £2,100 per month and the company would apply via their local authority, and if eligible, it would be backdated to August.