WE LOOK FORWARD TO WELCOMING YOU BACK TO OUR OFFICE!

With effect from Monday 10^th August, our gbac team has moved back to the office on a staggered basis. This is in line with Government guidance following COVID-19.

We wanted to share with you the steps we have taken to ensure that the office is a safe environment for our employees, their families, and our clients. This is the result of a thorough risk assessment which has been completed and revised throughout lockdown. For your information,

• Our team have been split into two social bubbles: ‘Bubble A’ and ‘Bubble B’ and will split their working week between home working and office working in order to adhere to the current social distancing measures.
• Our office now operates a one-way system.
• Hand sanitising stations have been installed around the office, these primarily being at the main touch points: outside the office door, in Reception, outside our meeting rooms and in our Kitchen area.
• Each member of staff has been provided with a personal “care pack”. This includes hand sanitiser, tissues and antibacterial wipes which will be replenished as / when required.
• We maintain a stock of PPE (face masks, visors, gloves etc). Our employees are not required to wear PPE under current guidelines due to the social distancing measures we have in place but we want to ensure that these are available in case employees choose to do so when in the office.
• Our office underwent a full deep clean on Friday 7^th August and will continue to be deep cleaned each evening following our return to the office.
• Meeting room capacity has been reduced to enable us to adhere to social distancing guidelines.
• Microsoft Teams / Zoom / Skype will continue to be part of daily business life to ensure that communication is not affected.
• Our risk assessment has been shared amongst our gbac team and feedback / discussions have been carried out during our time spent working from home to help devise a new office procedures manual to ensure that our employees are happy and comfortable with office life post COVID-19.

How might this change affect our clients:

We pride ourselves on being a welcoming team so we encourage clients to come into the office and speak with us. There have to be slight adjustments to how we do this so that we can ensure the safety of our employees, our clients and visitors.

We kindly ask the following:

• All visits to gbac office must be made by appointment. This is to ensure that we can adhere to social distancing measures. We have limited meeting room space and we cannot always guarantee that you can be seen, under COVID secure guidelines, if you turn up without an appointment.
• Once you arrive at the office, we have hand sanitising stations placed outside the front door and in Reception, it would be greatly appreciated if you could sanitise upon arrival.
• In line with updated Government guidance, face coverings must be worn by visitors entering our office. Therefore, we kindly request that you adhere to these rules to keep yourselves and our staff members safe and reduce any source of transmission of the Covid-19 virus. If you cannot wear a face covering due to medical reasons, please let us know in advance of your meeting.
• Face coverings must be worn throughout the duration of your visit.
• In line with Government guidance we will ask you for your contact details which we will hold on record for 21 days in respect of the track and trace programme and in line with GDPR regulations. The 21-day period reflects the incubation period for COVID-19 (which can be up to 14 days) and an additional 7 days to allow time for testing and tracing. In the event of a Covid-19 outbreak at the office, we will contact you to alert you using the contact details you have provided us with.
• All meeting rooms have been re-designed with social distancing measures in mind and a one-way system is in operation around the office. However, we do ask clients to go no further than our Reception desk.
• At this moment in time we will be unable to offer hot drinks. However, bottles of water will be provided. We ask that you dispose of these yourselves upon leaving the office or in the waste bins provided in the meeting rooms.
• We will be leaving 30-minute gaps between meetings to ensure that each room can be thoroughly cleaned and there is no cross-over between any two parties to limit any unexpected interaction with any other individuals.

We are grateful for your support and understanding during this phase which sees us start to welcome back clients to our office for physical meetings. Your safety and that of our gbac team and their families is at the forefront of every decision made. If you have any queries about our COVID-19 secure plan or wish to discuss any concerns, please do not hesitate to contact Charlotte Ward on 01226 298 298.

Cycling has received a significant boost since the Coronavirus crisis, with more people cycling to avoid public transport and get back to work. Cycle-to-work schemes give tax benefits to both employers and employees.

How the scheme works:

• Employers can register directly with most major retailers that support this scheme, typically by completing an online application, and chooses the scheme parameters, e.g. the spend limit.
• Employees can choose their bike and accessories in-store on online, make an online application to the scheme and agree the terms and conditions of the lease agreement.
• Once the employer approves the application, the employee may collect the bike, components and/or accessories from the retailer.
• The employer receives an invoice from the retailer for payment and implements a salary sacrifice scheme.

What are the tax benefits of a salary sacrifice arrangement:

• The employer recoups the bike cost from the employee via a salary sacrifice arrangement (a monthly deduction from gross salary) of the lease payments.
• Since a portion of the salary is foregone, the employee pays less tax and National Insurance Contributions on the amount sacrificed, i.e. the cost of a new bike and safety accessories.
• Employers also receive a 13.8% saving on Employers’ NIC.

What assistance are available to employers:

You can set up and run your own salary sacrifice scheme, or there are Cycle to Work scheme providers who can run a scheme for you.

Scheme providers usually have access to nationwide retailers with a wider range of brands of bikes, components and accessories, that will cater to employees’ preferences.

What to watch out for:

• It is ultimately the employee’s responsibility to look after the bike, and if the bike is lost, damaged or stolen the salary deductions will still continue until the end of the hire period.
• Specific rules apply if an employee were to leave your company, be made redundant or go on extended sick or maternity leave in their salary sacrifice period.
• The government provides a voucher scheme to employees for financial assistance with bike repairs costs.

If you require assistance and / or advice regarding the scheme or the administration of the salary sacrifice arrangements through your payroll, please don’t hesitate to get in touch with a member of our team.

The Covid-19 furlough scheme has been effectively revised into a new scheme running from 1 July until 31 October, but this comes with a level of complexity that did not exist in its original guise.

Much of the complexity arises because employers can now bring furloughed employees back to work flexibly on a part-time basis, while still being able to claim under the scheme for the hours not worked.

One very important change is that claims cannot now straddle months. This is because the scheme rules will change from month to month.

From 1 July, only employees who were furloughed under the original scheme ending on
30 June are eligible for further grants. However, the minimum three-week furlough period has now been removed.

Hours worked

For flexibly furloughed employees, employers will have to calculate the employee’s:

• Usual hours – There are two different calculations depending on whether an employee works fixed or variable (or zero) hours. The calculation can be confusing and may not always deliver the obvious answer, especially for employees on variable or zero hours.
• Actual hours worked – This could be an issue for directors who have no fixed hours. Accurate record keeping will be essential for both employees and directors. For hours actually worked, employees must be paid their normal wage.
• Furloughed hours worked – Simply calculated as usual hours less worked hours.

A new written agreement is required for flexibly furloughed employees to confirm the new arrangements.

When claiming for flexibly furloughed employees, employers should not claim until they are sure of the exact number of hours that will be worked during the claim period. If a claim is made in advance and fewer hours are worked than expected, a refund will have to be made to HMRC.

Maximum number

With certain exceptions, the maximum number of employees included in a furlough claim from 1 July onwards cannot exceed the highest number of employees included in any claim up to and including 30 June.

HMRC has provided various worked examples of how to calculate an employees’ wages, NICs and pension contributions.

If you require assistance and / or advice calculating your furlough claim, please don’t hesitate to get in touch with a member of our team. 

If you are self-employed or a member of a partnership and were eligible for the first self-employed income support grant, you will be eligible to claim for the second and final grant from the 17^th
August 2020, provided that you can confirm with HMRC that your business has been adversely affected by COVID-19 on or after 14th July 2020. 

The scheme works in the same way as when your first claim was made, with the only difference being that the grant is based on 70% of your average monthly trading profits, paid out in a single instalment covering 3 months and capped at £6,570 in total (the first claim was based on 80% of your average monthly trading profits).

You can make a claim for the second grant if you’re eligible, even if you did not make a claim for the first one. 

To claim you’ll need your:

• Government Gateway user ID and password – if you do not have a user ID, you can create one when you make your claim
• UK bank details (only provide bank account details where a BACS payment can be accepted) including:
  • bank account number
  • sort code
  • name on the account
  • your address linked to your bank account

It is expected that the final date you will be able to make your second and final claim is 19th October 2020.

HIGHLIGHTS

• A £1,000 Job Retention Bonus will be introduced when the Coronavirus Job Retention Scheme ends for employees who have been furloughed.
• A new Kickstart Scheme will cover employers’ costs for new six-month work placements for trainees aged 16-24.
• A £1,000 payment will be made to employers for each 16-24-year-old on work placement and training.
• Employers who hire new apprentices will receive payments of up to £2,000.
• There will be a temporary cut to Stamp Duty Land Tax on residential property, increasing the zero-rate band to £500,000 and saving purchasers up to £15,000.
• The rate of VAT will be cut temporarily from 20% to 5% for restaurant, food, accommodation and attractions businesses.
• An ‘Eat Out to Help Out’ Scheme will offer 50% meal discounts during August.

INTRODUCTION

The Chancellor, Rishi Sunak, has spent so much time in the spotlight that it seems hard to believe he has not yet been in the job for five months. Today’s Financial Statement was just the latest of a series of announcements by Mr Sunak since he presented his Spring Budget on 11 March, four weeks after entering 11 Downing Street. One way or another, all the announcements have been responses to the financial impact of the Covid-19 pandemic.

His latest statement was perhaps the most difficult, given the circumstances in which it was set:

• The government finances are in deep deficit. In only the first two months of the current financial year, the Treasury borrowed £103.7 billion, which was over six times as much as in the same period in 2019/20 and close to double the Budget forecast for the entire year. In May, for the first time since 1963, total government debt exceeded 100% of GDP the UK’s economic output for the whole year.

• The UK economy contracted by 2.2% in the first quarter of 2020, according to the Office for National Statistics (ONS). In April alone – the first full month of lockdown – the ONS estimates that there was a further 20% shrinkage in output.

• The Chancellor’s flagship employee furlough scheme, the Coronavirus Job Retention Scheme (CJRS), will start to be phased down in August. At that point, employers become responsible for the pension contributions and National Insurance Contributions (NICs) currently met by the Treasury. The CJRS, which has already been extended twice, is set to finish at the end of October. As of 5 July the scheme covered 9.4 million furloughed jobs provided by 1.1 million employers and had received claims totalling £27.4 billion.

• The constituent parts of the UK are each emerging from lockdown, a process that could lead to an increased infection rate and local flare ups, as has happened in many US states and parts of Europe. On the day before the Chancellor’s statement, the Organisation for Economic Development published a report saying the UK unemployment rate could reach 14.8% by the end of 2020 if there is a second wave.

The challenge for the Chancellor in his Summer Statement was to start the transition from the emergency employment support that has so far been the focus of his strategy. He presented his statement as a ‘Plan for Jobs’, composed of three elements promoting jobs:

1. Supporting

2. Protecting

3. Creating

The Chancellor placed a price tag on his measures of up to £30 billion. He also promised that in the Autumn Budget and Spending Review he would deal “with the challenges facing our public finances”.

SUPPORTING JOBS

The Chancellor announced a range of initiatives under the ‘Supporting Jobs’ heading, including:

Job Retention Bonus

The Chancellor made it clear that he intends to end the CJRS in October as planned. To encourage employers to support those people who have been furloughed, a Job Retention Bonus will be introduced.

The Job Retention Bonus will provide a one-off payment of £1,000 to UK employers for every previously furloughed employee who remains continuously employed through to the end of January 2021. Employees must earn more than £520 a month on average between the end of the CJRS and the end of January 2021. Payments will be made from February 2021. Further details about the scheme will be announced by the end of July.

Kickstart Scheme

The Kickstart Scheme, which only covers Great Britain, aims to provide “hundreds of thousands of high quality six-month work placements” for those aged 16-24, who are on Universal Credit and are considered to be at risk of long-term unemployment.

Government funding for each job will cover 100% of the relevant National Minimum Wage for 25 hours a week plus the associated employer NICs and employer minimum automatic enrolment contributions (a maximum of about £6,500).

There is to be no cap on the cost of the scheme.

Traineeships

Employers who provide work experience for 16-24-year-olds in work placements and training will receive a payment of £1,000 per trainee. Provision of traineeships and eligibility for them will be extended to those with Level 3 qualifications and below, to ensure that more young people have access to training.

Payments for employers who hire new apprentices
Employers in England will receive a new payment of £2,000 for each new apprentice they hire aged under 25, and a £1,500 payment for each new apprentice they hire aged 25 and over.

The scheme will run from 1 August 2020 to 31 January 2021. These payments will be made in addition to the existing £1,000 payment the Government already provides for new 16-18-year-old apprentices, and any of those aged under 25 with an Education, Health and Care Plan.

Other supporting jobs measures

Other initiatives under this heading include:

• £895 million to enhance work search support across Great Britain by doubling the number of work coaches in Jobcentre Plus before April 2021.
• An additional £150 million in the funding for the Flexible Support Fund in Great Britain, including increased capacity for the Rapid Response Service.
• £101 million for the 2020/21 academic year to give all 18-19-year olds in England the opportunity to study targeted high value Level 2 and 3 courses when there are not employment opportunities available to them.
• £95 million in 2020/21 to expand the scope of the Work and Health Programme in Great Britain to introduce additional voluntary support in the autumn for those on benefits who have been unemployed for more than three months.
• £40 million to fund private sector capacity to introduce a job finding support service in Great Britain in the autumn.
• £32 million new funding for the National Careers Service.

PROTECTING JOBS

The Protecting Jobs element focuses on the hospitality and leisure sector, which saw over 80% of firms temporarily cease trading in April and has 1.4 million furloughed workers. It is a sector of the economy that employs over two million people, according to the Chancellor, disproportionately drawn from the young, women and people from Black, Asian and minority ethnic communities.

Temporary VAT cut for food and non-alcoholic drinks

A reduced 5% rate of VAT will apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK. The temporary rate will apply from 15 July 2020 to 12 January 2021. Further guidance on the scope of this relief will be published by HMRC in the coming days.

Temporary VAT cut for accommodation and attractions

The 5% rate of VAT will also apply from 15 July 2020 to 12 January 2021 to supplies of accommodation and admission to attractions across the UK. HMRC will publish further guidance on the scope of this relief in the coming days.

Eat Out to Help Out

The ‘Eat Out to Help Out’ scheme will be introduced to encourage people to return to eating out. Every diner will be entitled to a 50% discount of up to £10 a head on their meal, at any participating restaurant, café, pub or other eligible food service establishment.

The discount can be used without limit throughout the UK on any eat-in meal (including on non-alcoholic drinks). It will be valid Monday to Wednesday during the month of August, and participating establishments will be fully reimbursed for the 50% discount.

CREATING JOBS

The job creation measures are primarily targeted on the housing and construction sector.

Stamp Duty Land Tax

Receipts of Stamp Duty Land Tax (SDLT – covering England and Northern Ireland) have fallen precipitously in the past few months, as the graph above shows. The slowdown in transactions has been accompanied by a stalling in prices – the latest data from Nationwide showed house prices falling in June 2020 for the first time in almost eight years. A temporary cut in SDLT on residential properties was widely trailed and duly arrived.

From 8 July 2020 to 31 March 2021, there will be no SDLT on the first £500,000 slice of property value, creating a maximum saving of £15,000. However, the 3% additional rate will still apply to additional properties.

The resulting revised SDLT table for residential property is shown below:

The rates of Land and Buildings Transaction Tax (LBTT) in Scotland and Land Transaction Tax (LTT) in Wales are set by the devolved administrations in those countries. In the past, they have tended to follow changes to SDLT with their own variations. At the time of writing, the devolved Governments had not made any announcements.

Green Homes Grant

A £2 billion Green Homes Grant will be introduced, providing at least £2 for every £1 up to £5,000 per household to homeowners and landlords who spend on making their residential properties more energy efficient. For those on the lowest incomes, the scheme will fully fund energy efficiency measures of up to £10,000 per household.

Other creating jobs measures

Other initiatives under this heading include:

• £5.6 billion of accelerated infrastructure investment, covering hospitals, schools, courts, prisons, town centre improvements and local road maintenance.
• A £1 billion investment over the next year in a Public Sector Decarbonisation Scheme that will offer grants to public sector bodies, including schools and hospitals, to fund both energy efficiency and low carbon heat upgrades.
• By boosting the Short-Term Home Building Fund, an additional £450 million in development finance will be made available to smaller firms that are unable to access private finance.
• £400 million will be allocated via the Brownfield Housing Fund to seven Mayoral Combined Authorities to bring forward land for development of homes in England.
• £100 million of new funding will be provided for researching and developing Direct Air Capture ­ a new clean technology that captures CO₂ from the air.
• A new Social Housing Decarbonisation Fund will be established to help social landlords improve the least energy-efficient social rented homes. It will start in 2020/21 with a £50 million demonstrator project.
• £40 million will be spent to improve the environmental sustainability of the courts and tribunals estate in England and Wales, investing in initiatives to reduce energy and water usage.
• Up to £40 million will be made available in a Green Jobs Challenge Fund for environmental charities and public authorities to create and protect 5,000 jobs in England. The jobs will involve improving the natural environment, including planting trees and creating green space for people and wildlife.
• £10 million of funding is to be made available immediately to the Automotive Transformation Fund for the first wave of innovative R&D projects to scale up manufacturing of the latest technology in batteries, motors, electronics and fuel cells.
• New legislation will be introduced in summer 2020 to make it easier to convert buildings for different uses, including housing, without the need for planning permission. In July 2020, the Government will launch a policy paper setting out its plan for comprehensive reforms of England’s planning system.

HMRC is allowing your second self-assessment payment due on 31 July 2020 on account for the tax year 2019/20 to be deferred, due to the Covid-19 pandemic.

This means no interest or penalties will be charged on the deferred payment provided it is paid by 31 January 2021. All taxpayers within self-assessment can take advantage of the deferral option, not just those who are self-employed. There is no need to tell HMRC that the payment on account is being deferred.

Paying the deferred amount

Although you can still make the payment by 31 July 2020 as normal if you’re able to do so, deferral will be attractive if cash flow is a concern. The deferred amount can then be paid between 31 July 2020 and 31 January 2021:

• in full using normal payment methods, or
• in instalments by setting up a budget payment plan with HMRC.

Snowball effect

Although you do not need to pay the deferred payment until 31 January 2021, there is likely to be a snowball effect if it is not paid off by then. This is because that is also the deadline for paying any balancing amount for 2019/20, plus the first payment on account for 2020/21. If you make your accounts up to 31 March or 5 April, then these amounts will be based on profits for the year ended 31 March/5 April 2020, so mainly pre-COVID-19.

Even though payments on account for 2020/21 can be reduced to an estimate of the tax and NICs that will actually be due for this year, these might not be as low as you expect once council COVID-19 grants and amounts received under the self-employment income support scheme are included.

As things currently stand, HMRC will apply the usual interest, penalties and debt collection procedures for payments missed from 31 January 2021 onwards.

Reductions to income caused by Covid-19 could affect your tax bill in other ways:

• It may now make sense to restart child benefit payments because your drop in income means they will not be taxed away to zero.
• You may have regained some or all of your personal allowance for 2020/21.
• You might become eligible for a higher personal savings allowance.

If you have suffered a drop in income, it is worth checking with on which actions to take now and which can be left to come out in the final HMRC tax calculation.

HMRC guidance on options for paying a deferred payment on account is available.

In response to the Coronavirus, COVID-19, the government announced there would be support for small businesses, and businesses in the retail, hospitality and leisure sectors, delivered through the Small Business Grant Fund and the Retail, Leisure and Hospitality Grant Fund. This new discretionary fund is aimed at small and micro businesses who were not eligible for the Small Business Grant Fund or the Retail, Leisure and Hospitality Fund. Local authorities will be responsible for delivering the grants to eligible businesses.

How much funding will be provided to businesses?

Local authorities may disburse grants to the value of £25,000, £10,000 or any amount under £10,000. The value of the payment to be made to a business is at the discretion of the local authority. Grants under the Local Authority Discretionary Grants Fund are capped at £25,000. The next level payment under the Local Authority Discretionary Grants Fund is £10,000. Local authorities have discretion to make payments of any amount under £10,000. It will be for local authorities to adapt this approach to local circumstances, such as providing support for micro-businesses with fixed costs or support for businesses that are crucial for their local economies. It is expected that payments of under £10,000 may be appropriate in many cases. In taking decisions on the appropriate level of grant, local authorities may want to take into account the level of fixed costs faced by the business in question, the number of employees, whether businesses have had to close completely and are unable to trade online and the consequent scale of impact of COVID-19 losses. Bearing in mind the above, local authorities should set out clear criteria for determining the appropriate level of grant to give businesses clarity.

Who will benefit from these schemes?

These grants are primarily and predominantly aimed at:

• Small and micro businesses, as defined in Section 33 Part 2 of the Small Business, Enterprise and Employment Act 2015 and the Companies Act 2006.

• Businesses with relatively high ongoing fixed property-related costs

• Businesses which can demonstrate that they have suffered a significant fall in income due to the COVID-19 crisis

• Businesses which occupy property, or part of a property, with a rateable value or annual rent or annual mortgage payments below £51,000.

To be a small business, under the Companies Act 2006, a business must satisfy two or more of the following requirements in a year:

• Turnover: Not more than £10.2 million

• Balance sheet total: Not more than 5.1 million

• Number of employees: a headcount of staff of less than 50

To be a micro business, under the Companies Act 2006, a business must satisfy two or more of the following requirements:

• Turnover: Not more than £632,000

• Balance sheet total: Not more than £316,000

• Number of employees: a headcount of staff of not more than 10

The government want local authorities to exercise their local knowledge and discretion and recognise that economic need will vary across the country, so some national criteria for the funds are being set, but local authorities are allowed to determine which cases to support within those criteria. Local authorities are asked to prioritise the following types of businesses for grants from within this funding pot:

• Small businesses in shared offices or other flexible workspaces. Examples could include units in industrial parks, science parks and incubators which do not have their own business rates assessment;

• Regular market traders with fixed building costs, such as rent, who do not have their own business rates assessment;

• Bed & Breakfasts which pay Council Tax instead of business rates; and

• Charity properties in receipt of charitable business rates relief which would otherwise have been eligible for Small Business Rates Relief or Rural Rate Relief.

The list set out above is not intended to be exhaustive but is intended to guide local authorities as to the types of business that the government considers should be a priority for the scheme. Authorities should determine for themselves whether particular situations not listed are broadly similar in nature to those above and, if so, whether they should be eligible for grants from this discretionary fund.

Local authorities set out the scope of their discretionary grant scheme on their website, providing clear guidance on which types of business are being prioritised, as well as the rationale for the level of grant to be provided (either £25,000, £10,000 or less than £10,000).

Eligibility

This grant funding is for businesses that are not eligible for other support schemes. Businesses which are eligible for cash grants from any central government COVID related scheme (apart from SEISS) are ineligible for funding from the Discretionary Grants Fund. Such grant schemes include but are not limited to:

• Small Business Grant Fund

• Retail, Hospitality and Leisure Grant

• The Dairy Hardship Fund

Businesses who have applied for the Coronavirus Job Retention Scheme are eligible to apply for this scheme. Businesses who are eligible for the Self-Employed Income support scheme (SEISS) are eligible to apply for this scheme as well.

Only businesses which were trading on 11 March 2020 are eligible for this scheme. Companies that are in administration, are insolvent or where a striking-off notice has been made are not eligible for funding under this scheme.

Application

Local authorities are currently awaiting further guidance from the government on how these grants should be administered, but check your local authority website for details are you may be able to submit an application now. For example:

Barnsley: https://my.barnsley.gov.uk/form/apply-for-a-discretionary-business-support-grant/page-1

Sheffield: https://www.sheffield.gov.uk/home/your-city-council/coronavirus-support-for-business/sheffield-covid19-grant-scheme

Leeds: https://www.leeds.gov.uk/coronavirus/apply-for-a-discretionary-grant

The Chancellor has announced plans to extend the SEISS for those people whose trade continues to be, or is newly, adversely affected by COVID-19.

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. You do not need to have claimed the first grant to claim the second grant: for example, if your business has been adversely affected by COVID-19 more recently.

As with the first SEISS grant gbac cannot as agents apply for the grant on your behalf. We are, as always, here to help you and can carry out the eligibility check if required and also review the figures calculated by HMRC.

We will send further updates as soon as we have more information, but please do not hesitate to contact us if you have any questions.

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

1. 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.

2. 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.

3. The scheme will close to new entrants from 30‌‌ June. This gives employers until 10 June to add any new employees to the scheme

Further information regarding each of these changes is detailed below.

1. 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, a month earlier than previously announced.

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.

2. 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 does not 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.
• 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.

3. Important dates

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.

As always, GBAC – accountants in Barnsley – are here to support. Please do not hesitate to give us a call on 01226 298 298 if you have any questions. 

Our accountants in Leeds and accountants in Sheffield are happy to help too.