Furlough and SEISS extension
Written by Ray Coman
Announced yesterday, the Chancellor has extended self-employment income support scheme (SEISS) and furlough of employees until October. The extension, according to Mr Sunak, makes the UK government covid response “amongst the most generous in the world.”
SEISS
The initial SEISS covered self-employment for the three months to 30 June. Applications for this grant will remain open until 13 July 2020. Further information can be found in the summary on Self-Employed Income Support Scheme. By way of recap the grant is 80% of three months’ profits, subject to a limit of £2,500 a month.
As second grant will be available from August in which self-employed individuals will be able to claim 70% of profit for an average three months. The payment will be subject to a monthly limit of £2,250. This equates to an overall limit of £6,750 for the three month period.
Furlough extension
Employers are able to obtain support for the cost of paying their staff who are not able to work because of the enforced lockdown conditions. However, the government plan will relax the lockdown in stages and alongside those measures taper grants. Currently, employers can reclaim 80% of the salary of any employees who have not been able to work due to Covid. The reimbursement is capped at £2,500 a month; however, the state will also fund employers NIC and pension obligations related to furloughed pay.
That coronavirus job retention scheme will continue in June and July 2020. It is hoped that with continued falls in the rate of infection more will return to work and in tandem the number furloughed will decline.
From August, the government will no longer cover employers’ NIC and nor help towards paying for occupational pensions.
In September, the government will help towards only 70% of the pay for furloughed employees and will reduce the cap to £2,187.50. Employers will be expected to pay the additional 10% of salary.
From October, an employer of a furloughed staff member will only receive compensation of 60% of their pay. The reimbursement amount is to be capped at £1,875. Until 1 September any top up of pay beyond the government reimbursement is voluntary. In September and October, the 10% and 20% payments will be a statutory requirement.
