The chancellor has announced that changes to the Coronavirus Job Retention Scheme are being brought forward to 1st July, as well as a second grant being made available to self-employed persons.
Coronavirus Job Retention Scheme
The second phase of the CJRS is set to begin on 1st July, a month earlier than originally planned. CJRS v2, which it is being called, brings the possibility for employees to work part-time and remain furloughed part-time. The government’s decision to bring the date forwards is an indication of the stance towards getting employees back to work and could bring some much-needed flexibility for employers.
The amount of grant money available to businesses will not change for July or August, but the government contribution is set to reduce over the remaining two months. In September, 70% of the employee’s wages will be available to claim, followed by 60% in October, with the employer making up remaining amount (10% in September and 20% in October). From the 1st August, the grant will no longer cover National Insurance or pensions contributions made by the employer.
It is important to note that to be eligible for the furlough grant from 1 July, employees must have already completed 3 weeks of furlough. This means, in effect, that employees must be furloughed by 10 June to qualify for CJRS v2. The Coronavirus Job Retention Scheme will not be accepting new applicants after 30 June. More detailed guidance will be released on 12 June.
Second grant available through the Self Employment Income Support Scheme
A second (and final) grant for self-employed persons is set to become available from August, with some minor changes. The criteria for calculating the value of the grant will remain the same, but the grant will be based on 70% of average earnings over 3 months up to a cap of £6,570. We expect to have more detailed guidance on this from 12 June.
Claims for the initial 3-month period of 1 March – 31 May must be made before 13 July. Unlike the Coronavirus Job Retention Scheme, an application for the second grant will be available whether the claimant received the first grant or not.
Get in touch
For up-to-date information about all the financial impacts of COVID-19, please visit out Coronavirus Hub. If you have further questions, please do not hesitate to call a member of our team on 01404 41977.