You are here: Home - Household Bills - News -

Self-employed and furlough scheme changes: Top takeaways

0
Written by:
15/06/2020
The government has issued updated guidance on both the Self-employment Income Support Scheme and the Coronavirus Job Retention Scheme (furlough). Here are the top takeaways.

Self-employment Income Support Scheme

Last month it was confirmed that self-employed workers whose businesses have been negatively hit by coronavirus would be able to claim “a second and final grant” in August.

These workers can apply for the first grant (80% of average monthly profits up to £2,500 a month for three months) until 13 July.

As part of the extension to the scheme, those eligible for the second and final grant (business adversely affected on or after 14 July 2020) will be able to make a claim in August – the online service for the second and final grant isn’t available yet

You can make a claim for the second grant even if you didn’t make a claim for the first grant.

This grant will be a taxable grant worth 70% of your average monthly trading profits, paid out in a single instalment covering a further three months’ worth of profits, capped at £6,570 in total.

Coronavirus Job Retention Scheme

Big changes to the scheme mean from 1 July, only employees who have been furloughed will be eligible for further grants. Employers will have until 31 July to make any claims for claim periods up to 30 June.

Employers will also only be able to claim for a certain amount of employees. This is down to the individual employer and is based on the number of employees which were already furloughed by 30 June 2020.

The guidance states that for furlough claims up to 30 June, if an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for the scheme.

A major change to the scheme which we already knew about was that after 1 July, furloughed employees can be brought back to work part-time. This can be for any amount of time and any shift pattern while they can be furloughed for the remaining period. However, this only applies to employees who have been previously furloughed, though can be applied to those returning to work for the first time after a period of parental leave.

It was also previously confirmed that from 1 August, the level of the grant will be slowly reduced and from 1 September, employers will need to contribute towards the cost of furloughed employees’ wages.

In September, the maximum amount furloughed employees can be paid stands at £83.34 a day, while in October, this figure stands at £80.65 a day.

The guidance states that employers will still need to pay National Insurance and pension contributions on furloughed employees’ pay.

‘System more flexible’

Kate Palmer, associate director of advisory at Peninsula, said: “The guidance gives us more of an idea of how employers will be able to furlough employees flexibly from 1 July 2020. It seems as though the system is indeed more flexible than the original rules with the minimum three-week period of furlough being removed; the new scheme allows flexible furlough to last for any amount of time. However, employers will need to be aware that the minimum claim period allowed is seven calendar days.

“The second ‘phase’ of the Job Retention Scheme is a marker for its gradual conclusion, which is expected at the end of October 2020. While some employers will be relieved that they are now permitted to meet growing demands from their customer base with a mixture of furlough, work and financial assistance from the government, the new scheme will not offer help to those who cannot yet open. Coupled with the introduction of employer contributions to wage costs, the impending end of the scheme will not be good news for all.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Coronavirus and your finances: what help can you get in the second lockdown?

News and updates on everything to do with coronavirus and your personal finances.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
A pension pot holding coins
“Pensions blackhole” warning as savings fall

Half of all pension savers won’t have enough cash for retirement due to market falls during the pandemic.

Close