It takes powerful backup to survive out on the Business Battlefield. With the COVID-19 pandemic still tearing through the UK economy, small firms across the country are looking to the government for support. Here are the latest updates on the schemes you can call on during the pandemic.
Out with the old...
The Coronavirus Job Retention Scheme is tapering off, and ends completely after the 31st of October. Until then, HMRC is coughing up 60% of your furloughed workers’ standard monthly pay, with a cap of £1,875 this month. This is a drop from the original figure of 80%, of course, so you’ll be expected to make up the difference as the government contributions tail off. You’ll also be footing the bill for National Insurance and pension contributions.
A couple of extra points:
The Job Support Scheme (JSS)
The new scheme has 2 different ways in which you can claim, firstly;
The Job Support Scheme is designed specifically to help out businesses with workers on reduced hours. After the 1st of November 2020:
Secondly, the scheme can change if you are in an area with local restrictions, this part of the scheme works as follows;
There’s an important update to this scheme which is set to make a big difference to some of the hardest-hit small businesses. On the 9th of October, it was announced that the JSS was being expanded to cover firms that have been legally forced to close by COVID-19 restrictions.
For firms in that situation, there will be grants available to help cover the wages of workers stuck at home by government coronavirus rules. This also includes businesses that have been told they’re restricted to delivery and collection services. The help becomes available for 6 months from the 1st November. It makes no difference whether or not you’ve claimed under the Coronavirus Job Retention Scheme previously, and CJRS itself will be winding up altogether at the same time. Payments will start coming in during December, paid monthly in arrears, with the scheme being set for a review in January.
The support on offer here comes to 2 thirds of their employee’s standard wages, with a monthly cap of £2,100. While the businesses claiming this grant won’t have to pitch in anything toward the wages themselves during this time, they’ll still be left holding the bag for National Insurance and pension contributions.
To be eligible employees must be employed and a RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 23 September 2020.
The Job Retention Bonus
Targeted at businesses with furloughed employees, the Job Retention bonus amounts to a £1,000 payment for each employee you claimed for through CJRS and keep on until at least the end of January 2021. Here’s how it breaks down:
As always, the bonus comes with the usual set of hoops to jump through to claim it. The official HMRC advice spells it out like this:
Whatever support you’re applying for throughout the COVID-19 crisis, you’ve got to keep your claims spotless. That means always getting what you’re eligible for – but not one penny more. Don’t just double-check the claim you’re putting in now, either. Go back and verify the ones you’ve already made. It’s always better to track down a mistake now than to regret it later. Claiming too little can be damaging, but claiming too much can get a whole lot worse if HMRC catches on before you do.
For CJRS claims, overpayments can be fixed by simply contacting HMRC and giving the money back. Do this within 90 days of receiving the overpayment. If your situation changed after you made the claim, so that you were no longer eligible, then you can fix it within 90 days of the shift in circumstances. There’s also a deadline of the 20th of October for businesses that received CJRS cash they weren’t entitled to on or before the 22nd of July. If more than one of those situations applies to you, then you work to the latest of the applicable cut-off dates.
As always, failure to fix an overpayment means opening yourself up to penalties and interest on top of giving back the money. You can send HMRC a heads-up about the mistake either in a subsequent claim or by contacting them directly.
Whatever support you’re relying on during the pandemic, remember that RIFT Accounting is still your strongest lifeline. Get in touch with any problems, questions or worries you have, and keep watching out for more Voices from the RIFT...