The government has now extended support through Furlough to millions to March 2021. Businesses and self employed welcomed the move but how will this affect them?
As a result, 80% of all employed, will be paid by the taxpayer. All eligible must have fulfilled the following criteria:
- Must have been on the payroll by the 30 October 2020.
- Employees did not have to be necessarily furloughed before.
- RTI (Real Time Information) must have been submitted by 23:59 on 30 October.
During the recent months, the government was paying 60% of the wages and 20% the employer, now it commits to paying the full 80% again.
HMRC will pay a maximum of £2,083.33 per month which is 2/3 of the UK median salary (£3,125)
Grants will be available for Business and Self Employed but they have to submit the claims in RTI (Real Time Information) submission and not in advance.
The portal for claims opens 11 November and claimants have until the 14 of 14 of December to submit the first claim. Similarly with every subsequent claim 14 of next month is the deadline.
Business Grants –
Amount of support will depend on the retainable value of the business.
- Tier 3 businesses can apply for grants for up to £3000 per month.
- Tier 2 – high alert areas such as hospitality sector, businesses with retainable value – £59,000, can claim grants of up to £2000 per month (20% of tier 3 allowance)
- A retainable value business between £35000 and £51,000 will receive support – £1400 per month.
- Retainable Value <£35000 – £934 per month.
Local government support will also be available for qualifying businesses.
For information about grants from local authorities, please contact your local authority directly, as those grants are at their discretion.
Self-Employment Grants –
Increase from 20 % of net profits to 40% capped at £3750 (up to £1875) for three months period (not monthly).
This works out as 40 % of the median salary (40%x3x £3125).
Government is yet to announce more details about First and Second grant.
Estimated cost -£3.1 billion
To ensure that support will be targeted to those who most need it, SEISS Grant extension will be available only to self-employed individuals who temporarily cannot trade, as well as those continuing to trade and facing reduced demand due to COVID-19.
Job Retention Bonus
Employers will be able to claim a one-off payment of £1,000 for the eligible employee they furloughed for all those employees they kept continuously employed and who meet other eligibility criteria.
Employers will not have to pay this money to their employee.
If employers have claimed too much CJRS and have not already repaid it, they must notify HMRC and repay the money by the latest of whichever date applies below
- 50 days from receiving the CIRS money they are not entitled to
- 90 days from the date circumstances change so that they were no longer entitled to keep the CIRS grant.
Furlough is now extended – the latest update -Your Tax Assistant
Read more Covid: Who can go back on to furlough? – BBC
Read more Winter Plan – Your Tax Assistant