MARCH 2021 BUDGET UPDATE
Extension to the Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme (CJRS) has been extended until the end of September 2021.
The UK Government will continue to pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, up to the end of June 2021.
For periods in July, CJRS grants will cover 70% of employees’ usual wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875.
Employers will need to continue to pay their furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month. This means, for periods between July and September, employers will need to fund the difference between this and the CJRS grants themselves. Employers can also top up wages above the 80% if they wish, but they are not required to do so.
Employers must also continue to pay the associated Employer National Insurance contributions and pension contributions on subsidised furlough pay from their own funds.
CJRS eligibility from May
For periods from 1 May 2021 onwards, employers will be able to claim for eligible employees who were on employers’ PAYE payrolls on 2 March 2021. This means they must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying us of earnings for that employee.
Your clients do not need to have benefitted from the scheme before to make a claim, as long as they meet the eligibility criteria.
For more information on the extension to the scheme and the support available, search 'Job Retention Scheme' on GOV.UK.
February CJRS claims
You can now submit claims for periods in February. These must be made by Monday 15 March.
Employers can claim before, during or after they process their payroll. If they can, it’s best to make a claim once they’re sure of the exact number of hours their employees worked so they don’t have to amend their claim later.
Check if your client and their employees are eligible and work out how much they can claim using our CJRS calculator and examples, by searching 'Job Retention Scheme' on GOV.UK.
What you need to do now
Self-Employment Income Support Scheme – future grants confirmed
The UK Government has today announced that the Self-Employment Income Support Scheme (SEISS) will continue until September with a fourth and fifth grant.
The fourth and fifth grants will take into account submitted 2019-20 tax returns. This means you may be able to claim, even if they were not eligible for previous grants. Your clients must have submitted their 2019-20 tax returns by 2 March 2021 to be eligible for the fourth and fifth grants.
Fourth SEISS grant
The UK Government will pay a taxable grant which is calculated based on 80% of three months’ average trading profits, paid out in a single payment and capped at £7,500 in total. The value of the grant is based on an average of your client’s trading profits for up to four tax years between 2016 to 2020, where available.
The grant will be available to claim from late April. As with previous grants, trading profits must be no more than £50,000 and at least equal to non-trading income in order to claim the fourth SEISS grant.
Eligibility for the fourth SEISS grant will also depend on whether your client experienced a significant financial impact from coronavirus between February 2021 and April 2021.
As the calculation now takes into account the tax year 2019-20, your clients who previously claimed SEISS grants may receive grants that are higher or lower in value than any previous SEISS payments they received.
We have moved quickly to ensure we have the information we need to check customers' eligibility before applications are open, while also protecting the SEISS from fraud. Where we need to make further checks, we will write to customers and explain that we will call them to ask for proof of identity and evidence of trade. To make these calls, we will use the telephone number on the customer's record. If this is their agent's number, we will ask that you provide us with your client’s contact number as we need to speak to them directly. Thank you for supporting your clients with this process, which will help make sure we can get support to people who need it.
Further details of the scheme can be found by searching 'Self Employed Income Support Scheme' on GOV.UK.
How you can claim the fourth SEISS grant
From mid-April, your clients will be given their personal claim date by HMRC which confirms the earliest date they can claim. We are inviting customers to claim on different days to ensure the system is fast and easy to use.
The online claims service for the fourth grant will be live from late April. This is to allow us time to process recently submitted 2019-20 Self Assessment tax returns.
Your clients must make their claim for the fourth grant between their personal claim date and 31 May 2021 at the latest.
Your clients will need to make an honest assessment that there has been a significant reduction in trading profits due to reduced demand or their inability to trade, and to keep appropriate records as evidence.
Fifth grant
The UK Government has also announced that there will be a fifth and final SEISS grant covering May to September. The amount of the fifth grant will be determined by how much your clients’ turnover has been reduced.
The grant will be worth 80% of three months’ average trading profits, capped at £7,500, for those with a higher reduction in turnover (30% or more). For those with a lower reduction in turnover, of less than 30%, then the grant will be worth 30% of three months average trading profits.
Your clients will be able to claim the fifth grant from late July if they are eligible. Further details will be provided on the fifth grant in due course.
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