Latest Grants and Support Schemes News
Posted on 26th October 2020 at 16:41
Latest news on the Wages Support Schemes, Self Employed Income Support Scheme (SEISS) and Grants available to businesses in Wales as of 22nd October 2020
We are in unprecedented times and at Ashmole & Co, we are very aware that we need to be at your side to help and support you through all the new guidance and legislation being brought in by Central and Welsh Government.
News on the latest Job Support Schemes
Help up until 31st October 2020
The existing Job Retention Scheme (furlough scheme) is being phased out on 31st October 2020, but will play an important role over the next week to support employers with wage costs, especially with the lockdown occurring from 6pm on 23rd October 2020.
• You can only furlough or flexible furlough (part time) employees up until 31st October 2020. In addition, you will have needed to furlough employees for three weeks prior to 30th June 2020 and have submitted the furlough claim to HM Revenue & Customs by 31st July 2020.
• If a Company Director is being furloughed then please remember they can nothing more than basic statutory duties for the Company whilst on furlough.
Help from 1st November 2020 – Is it an Open or Shut Case?
A lot of businesses are confused about the changes in terms of financial support from 1st November 2020 with the new Job Support Scheme.
We first wanted to speak about the financial assistance to those businesses who have been told to close by the Welsh Assembly. This Scheme is known as:
Job Support Scheme Closed
Each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month, although their employer has discretion to pay more than this if they wish .
The Job Support Scheme (both Closed and Open) does not follow the eligibility rules of the Job Retention Scheme which was in existence prior to 31st October 2020. For an employer to use the Job Support Scheme, then the eligibility criteria is as follows:
* Eligible employers will be able to claim the Job Support Scheme grant for employees who were on their PAYE payroll between 6 April 2019 and 23 September 2020. This means HMRC would have been notified at some point from 6 April 2019 up to 23 September 2020.
* Employers can only claim for employees that were in their employment on 23 September 2020. If employees ceased employment after 23 of September 2020 and were subsequently rehired, then employers can claim for them.
* Eligible employers will be able to claim the JSS Closed grant for employees whose primary work place is at the premises that have been legally required to close as a direct result of coronavirus restrictions, for a minimum period of at least seven consecutive calendar days.
• Employers will be able to access the Job Support Scheme if:
• they have enrolled for PAYE online
• they have a UK, Channel Island or Isle of Man bank account
Job Support Scheme Open
Many employers can operate safely but continue to face reduced demand so they may need extra support over the Winter to help keep their employees attached to their workforce. For these employers, the Job Support Scheme (JSS), through JSS Open, will give employers the option of keeping their employees in a job on shorter hours rather than making them redundant.
The new Job Support Scheme has been radically changed by the Government on 22nd October 2020 from their initial announcement on the scheme. The Job Support Scheme Open comes into effect from 1st November 2020 and will stay in place until 30th April 2021.
Under the JSS Open the employer contribution has now been reduced to 5% of employees usual unworked wages and the minimum hours working time has been reduced from 33% to 20%.
How the scheme works:
• The employee will need to work a minimum of 20% of their usual hours and the employer will continue to pay them as normal for the hours worked.
• Alongside this, the employee will receive 66.67% of their normal pay for the hours not worked - this will be made up of contributions from the employer and from the government.
• The employer will pay 5% of the salary for the hours not worked, up to a maximum of £125 per month, with the discretion to pay more than this if they wish.
• The Government will pay the remainder of 61.67% of the salary for the hours not worked, up to a maximum of £1,541.75 per month.
• This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.
• Large employers (employers with 250 or more employees) will have to meet a financial impact test, so the scheme is only available to those whose turnover has stayed level or is lower now than before experiencing difficulties from Covid-19. There will be no financial impact test for Small and Medium Enterprises and charities.
• The eligibility criteria is the same for both the Job Support Scheme Open and the Job Support Scheme Closed.
• To be eligible for the grant, employers must have reached written agreement with their employee or reached written collective agreement with a trade union where the relevant terms are determined by collective agreement that they have been offered a temporary working agreement. The agreement must be available for view by HMRC on request.
• This temporary working agreement must cover at least seven consecutive days.
• Employers should discuss with their staff and make any changes to their employment contract by written agreement. When employers are making decisions, including deciding to whom they should offer reduced hours, equality and discrimination laws will apply in the usual way.
• Employers cannot claim for an employee who has been made redundant or is serving a contractual or statutory notice period during the claim period.
• The employer will have to pay the Employers National Insurance and Employers Pension costs for each employee’s gross salary.
Business owners will then be thinking when will I receive the wages grant (JSS):
Employers will be able to claim in arrears from 8 December 2020, with payments made after the claim has been approved. Neither the employer nor the employee needs to have benefitted from the Coronavirus Job Retention Scheme to be eligible for the Job Support Scheme
Job Retention Bonus
The government has announced that it will pay a one-off bonus payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021. To qualify, employees must earn above the Lower Earnings Limit of £520 per month on average between the end of the Coronavirus Job Retention Scheme and the end of January 2021 and must not be serving contractual or statutory notice that started before 1 February 2021. The bonus will be paid from February 2021.
Latest Self Employed Income Support Scheme (SEISS)
On 22nd October Rishi Sunak has announced that the third SEISS grant will now be based on 40% of average trading profits and businesses temporarily unable to trade due to coronavirus will be eligible.
The level of the third grant will be based on 40% of average trading profits, rather than the previously announced 20%, and will be capped at £3,750. The level of the fourth grant is to be kept under review and announced in due course.
The third grant will cover the period 1st November 2020 until 31st January 2021, whilst the fourth grant will be for the period 1st February 2021 to 30th April 2021. As soon as we hear the date of when the self-employed income support grant can be claimed, we will off course let you know.
It remains the case that the self-employed individuals must have been trading prior to 5th April 2019, which is in line with the first two claims, and under the following proviso’s:
• are currently actively trading but are impacted by reduced demand due to coronavirus, or
• were previously trading but are temporarily unable to do so due to coronavirus
News on the Latest Grants available to Welsh Businesses
Following the First Minister’s announcement of a short firebreak, the Economic Resilience Fund is being enhanced to almost £300m, which includes an extra £150m to support to businesses affected by the firebreak. It also includes an additional £20m to the £80m fund already announced to help businesses develop in the longer term, of which £20m has been ring-fenced for tourism and hospitality.
The Economic Resilience Fund previously required companies to provide a percentage of match funding to access grants. However the Welsh Government has now confirmed it will provide 100% funding for businesses forced to close during the firebreak. This includes:-
Micro businesses (employing between 1 and 9 people) will be able to apply for up to £10,000 on the condition they match this with their own investment of at least 10%; For Tourism and Hospitality micro businesses and those micro businesses forced to close due to the short Fire Break lockdown there will be discretion for grant awards of up to 100%;
SMEs (employing between 10 and 249 people) will be able to apply for up to £200,000. Small businesses (up to 50 employees) will be required to match this with their own investment of at least 10% and medium businesses (between 50 and 249 employees) with at least 20% of their own funding; For Tourism and Hospitality SME’s and those micro businesses forced to close due to the short Fire Break lockdown there will be discretion for grant awards of up to 100%;
Large businesses (employing 250+ people) will be able to apply for up to £200,000 on the condition they match this with their own investment of at least 50%.
The Economic Resilience Fund is expected to open on 28 October at the time of writing.
Lockdown Business Fund
The Lockdown Business Fund is also expected to open on 28 October.
* Every business occupying a property with a rateable value of £12,000 or less will be eligible for a £1,000 payment.
* Retail, leisure and hospitality businesses forced to close during the firebreak lockdown period occupying a property with a rateable value between £12,001 and £51,000 will be eligible for a £5,000 payment.
* A discretionary £2,000 top-up grant will be made available on an application basis for those businesses with a rateable value of £12,000 or less who are forced to close by the firebreak lockdown.
* A further discretionary £1,000 grant will be made available to businesses on the same basis where they are materially affected by local lockdown measures for 21 days or more prior to the start of the firebreak lockdown period.
Further information will be released shortly.
If you need any assistance or advice then please contact your local Ashmole & Co office.
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