Covid-19 Government Support Update

Updated Financial Support for Jobs and Businesses

As we enter a new national lockdown, the Chancellor of the Exchequer, Rishi Sunak, has announced further financial support to help individuals, families and businesses through the next few months.

Coronavirus Job Retention Scheme (CJRS)

Previously it had been announced that the scheme would be extended until 2nd December to cover the period of this second lockdown however it has now been announced that it will be extended until the end of March 2021 for all parts of the UK. The Job Support Scheme which had been set up to replace the CJRS has now been postponed.

Eligible employees will receive 80% of their usual salary for hours not worked up to a maximum of £2,500 per month. There will be no employer contributions to wages for hours not worked, but employers will be asked to cover National Insurance and employer pension contributions for the hours not worked. This will be reviewed in January, with the possibility of employers being asked to contribute further towards their employers pay.

Employers will have the flexibility to use the scheme for employees for any amount of time and shift pattern, including furloughing them full time. Neither the employer nor the employee needs to have previously claimed under the CJRS. Employers can claim for employees who were employed and on their PAYE payroll on 30 October 2020 and the employer must have made an RTI submission to HMRC between 20 March 2020 and 30 October 2020.

Employees who were employed and on the payroll on 23rd September 2020 and were made redundant or stopped working after this date can be re-employed and claimed for under the CJRS.

The CJRS will continue to operate in the same way as it has previously with employers being able to claim either shortly before, during or after running the payroll. Claims should be submitted by day 14 of the following month.

The Job Retention Bonus previously planned to be paid in February will no longer be paid in February and will be delayed until an appropriate time.

Self-Employment Income Support Scheme (SEISS)

The SEISS will be extended to support individuals who are self employed and experiencing reduced demand or unable to trade because of Coronavirus. The grant will be 80% of trading profits covering November to January. It is calculated based on 80% of 3 months average trading profits, paid out in a single instalment capped at £7,500.

The window for claiming the grant will open on 30 November and HMRC plan to pay the grant before Christmas. A further grant for February to April has also been confirmed with further details in due course.

Mortgage and consumer credit payment holiday extension

Mortgage payment holidays will continue to be available to homeowners in the UK. Borrowers who have been impacted by the pandemic and have not yet had a mortgage payment holiday are entitled to a 6-month holiday. Those who have already started a mortgage payment holiday will be able to top up to 3 months without this being recorded on their credit file.

Consumer credit payment holidays will also continue to be available such as on personal loans and car finance. Similarly to mortgages, borrowers impacted by the pandemic who have not yet taken a holiday can ask for one up to 6 months and those who currently have a payment holiday can top up to 6 months without this being recorded on their credit file.

Written by Alice Gay ACCA ACIPP

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