The deadline for claiming in the first round of SEISS grants is rapidly approaching and for employers changes to the Furlough Scheme kick in from August requiring them to make a contribution towards employee salaries.
SEISS Grants deadlines
Unless you’re still unsure if you have been adversely impacted by the Coronavirus, if you are self employed you’ve probably already dipped into the SEISS Grants (Self-Employment Income Support Scheme) and had a wedge of cash land in your bank account from the government. Many won’t have needed is as, albeit undoubtedly with some challenges, they have seen business and profits soar during the lock down as consumers flocked online during the shop closures. However others will have been massively impacted and seen their income plummet – if that’s you, and you qualify, there’s still time to claim but the deadline for claiming is this coming Monday the 13th of July.
Second and final SEISS Grants
For those who are still being impacted on or after the 14th of July 2020 (don’t forget you need to retain proof your income was down such as dates you had to self isolate or couldn’t work), then there’s a second wedge available under SEISS Grants and claims for the second and final round can be claimed from the 17th of August 2020 when the online service will be available.
Just because you claimed in the first round of SEISS Grants doesn’t mean you should or have to claim in the second round. Equally, if you didn’t claim in the first round but your self employment profits have now dried up then you can still claim in the second round of SEISS Grants.
Evidence for claiming SEISS Grants
You should verify the SEISS Grants evidence you are required to keep demonstrating that your business has been adversely affected by Coronavirus. If HMRC decide to examine your claim in more detail which could be many months into the future when it appears on your tax return. HMRC states that valid evidence includes:
- Business accounts showing a reduction in turnover
- Confirmation of any Coronavirus-related business loans received
- Dates your business had to close due to lockdown restrictions
- Dates you or your staff were unable to work due to Coronavirus symptoms, shielding, school closures
Remember that you will need to report your SEISS Grants on your 2020/2021 tax return alongside the income that you made during that financial year.
Furlough Scheme Changes
From August, employers will be asked to start help fund the cost of furloughed workers with ‘a new taper requiring employers to contribute ‘modestly’ to furloughed salaries.
July
For July, the government will pay still 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions for any of your staff still on furlough. Employers are not required to pay anything.
August
During August, the government will pay 80% of wages up to a cap of £2,500 for workers on furlough. Employers will required to pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.
September
The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.
October
The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.
“After eight months of this extraordinary intervention of the government stepping in to help pay people’s wages, the scheme will close.”
– Rishi Sunak, Chancellor
