Furlough - The Next Steps
Recognising that businesses have been through an “incredibly difficult time”, the Chancellor has revealed how the slow introduction of the employers' CJRS contribution will work. 

The furlough scheme will continue in its current guise, paying 80% of employees’ wages up to £2,500 with no employer contribution. But from August employers will be expected to pay a “modest contribution”.

Employers Contribution
Employers will only have to cover national insurance and employer contributions, which accounts for 5% of total employment costs.

The main change comes into force from September, when the government furlough contribution drops from 80% to 70%, with the employer having to pick up the 10%. 

Then in October, the final stage of the furlough scheme, employers will have to pay 20%, with the government’s contribution shrinking to 60%. After this, the government contributions will finish and the scheme will come to an end.

Part-Time Furlough
Although employers will have to prepare for the inevitable end of the scheme, the Chancellor has listened to large and small businesses' request for a more flexible furlough.

As announced earlier this month, a new element of furlough 2.0 is to enable workers to return part-time whilst still being under the scheme – and this aspect will arrive one month earlier than originally planned, from 1 July.

The Chancellor used the example of how a furloughed worker could return for two days and would be paid as normal, while the government would cover the other three days.  

The scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three week period prior to 30 June.

This means that the final date by which an employer can furlough an employee for the first time will be 10 June, in order for the current three week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.

If you are an employer and have any queries, please contact us. We're here to help.
Surprise Extension of the SEISS
Freelancers and self-employed workers who had urged the Chancellor to extend the SEISS in line with furlough scheme were handed a lifeline with news of a final grant.

Starting in August
The self-employed scheme will open for applications in August, but with the grant reduced to 70% of their average monthly trading profits. As with the SEISS scheme, the money will be paid in a single instalment covering three months’ average monthly profits up to £6,570, down from the £7,500 cap of the first grant. 
The government has not changed the eligibility criteria for the second grant. As with the first version, individuals will have to confirm that they've been adversely affected by Covid-19. However, a self-employed worker does not have to have claimed the first SEISS grant in order to be eligible for this final handout.  

The self-employed income support scheme has so far supported 2.3m people with claims worth £6.8bn. The first grant is still open for applications but self-employed workers have until 13 July to apply.

If you think that you may be eligible and have any queries, please contact us
Extension of Furlough Scheme
The current terms of the furlough scheme will remain unchanged until the end of June but from 1 July onwards it will allow greater flexibility to phase furloughed employees back to work.

Part-Time Option From July
While the finer details have yet to emerge, the Chancellor said this “greater flexibility” would enable employers currently using the scheme to bring workers back part-time. Employers who choose to do this will be asked to pay a percentage towards the salaries of their furloughed staff, which will replace the government’s contribution.

But as always, the devil is in detail, as Blick Rothenberg’s Heather Self raised: “Enabling part-time work is welcome, as it will permit a gradual return to work. But the Chancellor said this would only be available to businesses ‘currently using’ the scheme – it is not clear what the cut-off date will be for businesses still considering whether they need to furlough employees.”
Employers Sharing the Costs
The government will also ask employers to share the costs of paying people’s salaries and more details about the extension will follow by the end of May. With the original end of June cut-off creeping closer, employers were looking to the Chancellor today for clarity on the furlough scheme before the 45-day redundancy consultancy period kicked in.

Any Questions?
If you would like to discuss how the extension of the furlough scheme affects your business, please contact us. We're happy to help.
Bounce Back Loan for Small and Medium-Sized Businesses
The government’s coronavirus Bounce Back Loan is available to businesses affected by COVID-19 from 4 May 2020.

The scheme helps small and medium-sized businesses borrow between £2,000 and £50,000.

The loans are to be 100% government-backed. Businesses can apply for 25% of their turnover. Loans can be paid back over a maximum period of six years, with no repayments or interest due within the first 12 months. The government is negotiating a low rate of interest with the accredited lenders who will deliver the scheme.

Chancellor Rishi Sunak said: “There will be no forward-looking tests of business viability; no complex eligibility criteria; just a simple, quick, standard form for businesses to fill in.” Businesses will be able to apply via an online form and will receive loans within 24 hours of approval.

Who is Eligible?
You can apply for a loan if your business:
  • is based in the UK;
  • has been negatively affected by coronavirus; and
  • was not an ‘undertaking in difficulty’ on 31 December 2019.
You are not able to apply if you are already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS). In addition, this funding is not available to state-funded schools (primary and secondary), public sector organisations, plus banks, insurers and reinsurers. (Insurance brokers are able to apply.)

Applying for a Bounce Back Loan
Details of how to apply will be available in time for the launch date of 4 May 2020. Watch this space!

In the meantime, please contact us if you have any queries. Plus, you are welcome to review the support available to business during the current times by visiting our COVID-19 Update page.

Get in touch - If you'd like to find out more about how we can help you and your business pay less tax, generate more profits and create long-term wealth for you and your family, please get in touch now