Pay Less Tax – Spring 2024 Edition
The Government has announced that it is going to:
- Extend the Coronavirus Job Retention Scheme until the end of March 2021
- Not pay the Job Retention Bonus in February
- Increase the third self-employed grant, covering November to January, from 55% to 80% of trading profits
- Increase the application deadline for loan schemes
Extending the Coronavirus Jobs Retention Scheme (CJRS)
The CJRS scheme is being extended until the end of March 2021.
Eligible employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. Businesses will have flexibility to use the scheme for employees for any amount of time and shift pattern, including furloughing them full-time.
There will be NO employer contribution to wages for hours not worked. Employers will only be asked to cover National Insurance and Employer pension contributions for hours not worked. For an average claim, this accounts for just 5% of total employment costs or £70 per employee per month.
The government will review the policy in January 2021 to decide whether economic circumstances are improving enough to ask employers to contribute more.
The extended CJRS will operate as the previous Scheme did, with businesses being able to claim either shortly before, during or after running payroll. Claims can be made from 8am Wednesday 11 November. Claims made for November must be submitted to HMRC by no-later than 14 December 2020.
Claims relating to each subsequent month should be submitted by day 14 of the following month, to ensure prompt claims following the end of the month which is the subject of the claim.
Neither the employer nor the employee needs to have previously claimed or have been claimed for under CJRS to make a claim under the extended CJRS (if other eligibility criteria are met).
An employer can claim for employees who were employed and on their PAYE payroll on 30 October 2020. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
Employees that were employed and on the payroll on 23 September 2020 (the day before the Job Support Scheme announcement) who were made redundant or stopped working afterwards can be re-employed and claimed for. The employer must have made an RTI submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.
HMRC will publish details of employers who make claims from December onwards under the extended scheme. Full details of this will be within the detailed guidance to be published next week.
In the meantime, the Job Support Scheme is postponed.
Job Retention Bonus (JRB)
The JRB will not be paid in February 2021 but will redeploy a retention incentive at the appropriate time.
More help for the self-employed
The Government has announced that they are increasing the overall level of the grant available to the self-employed to 80% of trading profits covering November to January for all parts of the UK.
It will be calculated based on 80% of 3 months’ average trading profits, paid out in a single instalment and capped at £7,500.
HMRC will pay this increased grant sooner than planned and in good time for Christmas. The window for claiming a grant will open on 30 November, two weeks earlier than previously announced.
Details of a fourth SEISS grant covering February to April will be released in due course.
Guarantee loan schemes
The application deadline for loan schemes – that is, the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, Future Fund, and Coronavirus Large Business Interruption Loan Scheme has been extended to the end of January 2021. This will give businesses two extra months to make loan applications (relative to the current deadline of 30 November).
The Bounce Back Loan Scheme rules have also been amended to allow those businesses who have borrowed less than their maximum (i.e. the lower of £50,000 or less than 25% of their turnover) to top-up their existing loan. Businesses will be able to take-up this option from next week; they can make use of this option once.
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