LWA Blog: Further changes to the Coronavirus Job Retention Scheme & Self-Employment Income Support Scheme
The Government has made several announcements recently which include changes to the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme (SEISS) as well as confirming a delay to the VAT Reverse Charge for the construction sector. Please read on for further details and if you have any queries at all, please do not hesitate to contact a member of our team.
FLEXIBLE FURLOUGH SCHEME (FFS) EFFECTIVE FROM 1ST JULY, MEANS CHANGES TO DOCUMENTS AND RECORD KEEPING.
From 1st July, the CJRS will close for employees that have not been furloughed before. Employees who have previously been furloughed for at least a 3 week period will be able to start returning to work on a part-time basis, and will be entitled to furlough pay for the hours they don't work (the minimum 3 week period will change to 1 week, except for claims being made on the first or last day of the month).
• As an employer, you will have the flexibility to decide hours and shift patterns for your returning employees.
• You will need to issue a new written agreement to the employee detailing what hours they will work.
• Each time the number of hours or shift pattern changes, a further new agreement will need to be issued.
• You will need to keep records of these agreements for 5 years.
• A record for all hours worked and all hours furloughed will need to be kept for 6 years.
• You will need to keep a record of all CJRS claims made including your calculations, amounts claimed and reference numbers for each claim.
• Furlough claims will no longer be able to made across months.
• The maximum number of employees you will be able to furlough from July onwards will have to equate to the highest number of employees you have claimed for before 30th June.
• You will have the responsibility for paying your employees.
• For any staff remaining on furlough leave in June and July, the Government will continue to pay 80% of wages / salaries via the Coronavirus Job Retention Scheme, up to £2,500 per month per employee, plus National Insurance (ER NICS) and employer pension contributions. Employers will not need to pay anything.
From 1st August, The Government will pay 80% of wages / salaries up to £2,500, however the employer will need to pay ER NICS and employer pension contributions.
From 1st September, for any employees on furlough leave, the Government will pay 70% of wages / salaries up to a maximum of £2,187.50 with employers paying 10% up to a combined £2,500, as well as paying the ER NICS and employer pension contributions.
From 1st October (the last month that the CJRS will be active), the Government will pay 60% of furloughed employees' wages / salaries to a maximum of £1,875, with the employer paying the remaining 20% to the £2,500 cap, as well as ER NICS and pension contributions.
Please could we take this opportunity to remind our payroll clients to let us know as early as possible ahead of the employee return-to-work date as well as the hours they will be working / hours they will be furloughed. You can call 0161 905 1801 or you can email Sara@lwaltd.com or Angela@lwaltd.com to let us know. Thank you.
SELF-EMPLOYMENT INCOME SUPPORT SCHEME (SEISS) WIDENED FOR PARENTS
The SEISS has been amended to include mothers, fathers and anyone that has adopted a child / children during the tax year 2018 to 2019 (or the tax years 2016-17, 2017-18 and 2018-19 where the average income would have been affected), and would have spent those years to care for their children after the first 12 months of birth, or within 12 months of an adoption placement, rather than trading. Those parents will now be able to use their 2017-18, or both of their 2016-17 and 2017-18 self-assessment tax returns as proof of eligibility for SEISS.
The remaining eligibility criteria will also have to be satisfied in order to receive financial support under the scheme.
Whether you still need to claim from the first grant or believe you might need to claim from the second grant, you can check your eligibility below.
DOMESTIC REVERSE CHARGE VAT FOR CONSTRUCTION SERVICES - DELAY IN IMPLEMENTATION
We'd reported in September 2019 that HMRC had delayed the implementation of the Reverse Charge to October 2020 due to Brexit. However, please be advised that HMRC has now announced a further delay to 1st March 2021. We've summarised the information for you and have detailed why it will be important to manage your cashflow ahead of the new legislation.
PLEASE GET IN TOUCH WITH OUR TEAM
If you have any questions on any of the updates above, please feel free to contact a member of our team on 0161 905 1801 in Manchester, or 01925 830 830 in Warrington.