Job Support Scheme
The Chancellor announced a new scheme to help employers retain their employees. The Job Support Scheme (JSS) commences from 1 November, replacing the Coronavirus Job Retention Scheme which ends on 31 October. The JSS will run for 6 months.
For every hour not worked, the employer and the Government will each pay one-third of the employee's usual pay, and the Government contribution will be capped at £697.92 per month.
This means that employees will receive at least 77% of their salary, where the Government contribution has not been capped. The grant will not cover Class 1 employers' NI or pension contributions, although these contributions will remain payable by you.
To get a rebate on an employee's pay under the JSS, the employee must work a minimum of 33% of their usual hours and must not be on notice of redundancy. This minimum threshold requirement will apply for the first three months of the scheme, after which the Government will consider whether to increase it.
You will be able to cycle employees on and off the scheme, and they do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of seven days.
VAT Deferral due to COVID-19
Businesses who deferred VAT due from 20 March to 30 June 2020 will now have the option to pay in smaller payments over a more extended period. Instead of paying the full amount by the end of March 2021, you can make smaller payments up to the end of March 2022, interest-free.
You will need to opt-in to the scheme, and for those who do, this means that your VAT liabilities due between 20 March and 30 June 2020 do not need to be paid in full until the end of March 2022.
Those that can pay their deferred VAT can still do so by 31 March 2021. For more information on VAT deferral repayments click here.
Self-Employment Income Support Scheme Grant Extension
The extension will provide two grants and will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period.
The first grant will cover a three-month period from the start of November until the end of January. HMRC will provide a taxable grant covering 20 per cent of average monthly trading profits, paid out in a single instalment covering 3 months' worth of profits, and capped at £1,875 in total.
HMRC are providing broadly the same level of support for the self-employed as is being provided for employees through the Job Support scheme.
The second grant will cover a three-month period from the start of February until the end of April. HMRC will review the level of the second grant and set this in due course.
The grants are subject to Income Tax and National Insurance Contributions.
For more information on this topic click here or get in touch with the Sheards team.