COVID-19 Second Update

This is our tenth update on COVID-19 guidance and includes new details announced as follows:

The extension of the Coronavirus Job Retention Scheme (CJRS)
The extension of the Self-Employment Income Support Scheme
The next phase of the Economic Resilience Fund in Wales
For businesses based in England, the new Local Authority Discretionary Grants Fund
The SSP claim you can make as an employer if your employee is off work due to coronavirus.

Also please note that the Covid-19 non-domestic rates (NDR) grant schemes will be closing to new applications at 5pm on 30th June 2020. If you are eligible and you have not already applied, you will need to apply via your local authority before this date.

As usual, please beware of fraudulent offers of help by emails, texts, phone calls and letters.

Coronavirus Job Retention Scheme

The Chancellor has announced three changes to the job retention scheme:

From 1‌‌ July 2020, the scheme will be made more flexible to enable employers to bring previously furloughed employees back part time and still receive a grant for the time when they are not working.

From 1‌‌ August 2020, employers will have to start contributing to the wage costs of paying their furloughed staff and this employer contribution will gradually increase in September and October.

The scheme will close to new entrants from 30‌‌ June.

Part time furloughing

From 1 July 2020, businesses using the scheme will have the flexibility to bring previously furloughed employees back to work part time – with the government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced to help people get back to work.

Employers will decide the hours and shift patterns their employees will work on their return and will be responsible for paying their wages in full while working. This means that employees can work as much or as little as the business needs, with no minimum time that they can furlough staff for.

Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of a week. They can choose to make claims for longer periods such as on monthly or two weekly cycles if preferred. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

If employees are unable to return to work, or employers do not have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules.

Employer contributions

From August, the government grant provided through the job retention scheme will be slowly tapered.

in June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn't work – employers will have to pay employees for the hours they work

in August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed

in September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total, up to a cap of £2,500

in October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total, up to a cap of £2,500

the cap on the furlough grant will be proportional to the hours not worked.

Many smaller employers have some or all of their employer NIC bills covered by the Employment Allowance so will not be significantly impacted by that part of the tapering of the government contribution.

Around a quarter of CJRS monthly claims relate to wages that are below the threshold where employer NICs and auto enrolment contributions are due, and so no employer contribution will be required for these furloughed employees in August.

Important dates

It's important to note that the scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June.

This means that the final date by which an employer can furlough an employee for the first time will be 10 June for the current three-week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.

Guidance and support

Further support for employers and agents on how to calculate claims with this extra flexibility will be available by 12 June, including webinars and detailed online guidance.

Welsh Resilience Fund Phase 2

Phase 1 of the scheme has closed for new applications and the Phase 2 will begin this month.

The eligibility checker for new applications will hopefully be open by the middle of June 2020 to allow companies time to prepare their application and Welsh Government expects to open the fund for full applications later in the month.

This will enable access to the remaining £100 million of the £300 million already approved and allocated to support micro businesses, small and medium enterprises and large businesses.

In terms of eligibility, Phase 2 of the Fund will operate in the same way as Phase 1 but with an update to the micro scheme, which will enable limited companies who are not VAT registered to access the Fund.

Further details about the fund will be on the Business Wales website shortly.

Self-Employment Income Support Scheme

The Chancellor also announced plans to extend the Self-Employment Income Support Scheme (SEISS) for those people whose trade continues to be, or is newly, adversely affected by COVID-19 (coronavirus). Eligible self-employed people will be able to claim a second and final SEISS grant in August; this will be a taxable grant worth 70% of their average monthly trading profits for three months, paid out in a single instalment and capped at £6,570 in total.

The eligibility criteria for the second grant will be the same as for the first grant. People do not need to have claimed the first grant to claim the second grant: for example, their business may have been adversely affected by COVID-19 (coronavirus) more recently.

Claims for the first SEISS grant, which opened on 13 May, must be made no later than 13 July. Eligible self-employed people must make a claim before that date to receive the first SEISS grant (a taxable grant of 80% of their average monthly trading profits, paid out in a single instalment covering 3 months' worth of profits, and capped at £7,500 in total). So far, over 2.3 million claims have been made worth a total of £6.8 billion.

The eligible individual must make the claim themselves as otherwise a fraud alert may be triggered that will result in delays to payment.

More information about the second SEISS grant will be available on GOV.UK on 12 June.

Local Authority Discretionary Grants Fund

Small and micro businesses in England with fixed property costs that are not eligible for the Small Business Grant Fund or the Retail, Hospitality and Leisure Grant Fund may be eligible for the Discretionary Grants Scheme.

What you get

You can get a grant of £25,000, £10,000 or any amount under £10,000.

Eligibility

You are potentially eligible if your business:

is based in England
has fewer than 50 employees
has fixed building costs such as rent
was trading on 11 March 2020
has been adversely impacted by the coronavirus
is not in administration or insolvent and has not received a striking-off notice from Companies House.

Councils have been asked to prioritise businesses such as:

small businesses in shared offices or other flexible workspaces, such as units in industrial parks or incubators
regular market traders
bed and breakfasts paying council tax instead of business rates
charity properties getting charitable business rates relief, which are not eligible for small business rates relief or rural rate relief

You cannot apply if you're already claiming under another government grant scheme, such as:-

Small Business Grant Fund
Retail, Hospitality and Leisure Grant
Fisheries Response Fund
Domestic Seafood Supply Scheme
Zoos Support Fund
Dairy Hardship Fund

You're still eligible if you've applied for the Coronavirus Job Retention Scheme or the Self-Employed Income Support Scheme.

Businesses that apply for the discretionary grants scheme can still apply for coronavirus-related loans if they're eligible.

The discretionary grants fund counts towards state aid.

Payments of £10,000 or less count towards the total de minimis state aid you're allowed to get over a 3 year period - £200,000. If you have reached that threshold, you may still be eligible for funding under the COVID-19 Temporary Framework.

Payments of £25,000 count as state aid under the COVID-19 Temporary Framework. The limit for the framework is £800,000.

Your local council will ask you to complete a declaration confirming that:

You will not exceed the relevant state aid threshold
You were not an 'undertaking in difficulty' on 31 December 2019. This applies only to the COVID-19 Temporary Framework.

How to apply

Visit your local council's website to find out how to apply.