This guide outlines the key facts you need to know about furlough leave and the revised scheme applicable from 1 July onwards
As part of its response to the COVID-19 pandemic, the government set up the Coronavirus Job Retention Scheme (CJRS) and the income support scheme for the self-employed.
The table below outlines the details of these, as well as other schemes introduced by the government to provide support during the COVID-19 pandemic.
Quick reference table showing the government's coronavirus support schemes
- GRANTS FOR EMPLOYERS:
- The Coronavirus Job retention scheme (CJRS)
- The Job Support Scheme (JSS)
- The Job retention bonus
- TAX AND REBATES:
- Time to pay scheme (for income and corporation tax)
- Valued Added Tax (VAT) Deferral
- Suspension of wrongful trading rules
- Three-month extension for filing accounts
- Postponement of reforms to IR35
- Statutory Sick Pay Rebate
- Coronavirus Large Business Interruption Loan Scheme
- Covid-19 Corporate Financing Facility
- Coronavirus Business Interruption Loan Scheme for SMEs
- Small Business Grant Funding
- Support for the self-employed:
- Bounce back loans
- Deferral of Self Assessment
- Self-Employment Income Support Scheme
- Council tax deferral
- Business rates holiday and cash grant for retail, hospitality and leisure
- Test and Trace Support Payment
- Universal Credit
- Employment and Support Allowance (ESA)
- Lockdown grants for retail, hospitality and leisure businesses
- Local Restrictions Support Grants
- Additional Restrictions Grant
- The Christmas Support Payment for wet-led pubs
Details of the scheme
- The Coronavirus Job Retention Scheme (furlough scheme) has been extended until April 2021. The extended CJRS operates the same as the previous scheme, with the level of the grant mirroring levels available under the CJRS in August. The government will pay 80% of wages up to a cap of £2,500 and employers will pay employer National Insurance Contributions (NICs) and pension contributions for the hours the employee does not work and any hours worked. More information on the CJRS is available in our furlough FAQs.
- This scheme comprises the JSS open and JSS closed systems. However this has been postponed indefinitely. If revived the level of government support for businesses depends upon which Local COVID Alert Level they are in, and any resulting imposition of restrictions. The scheme requires a mix of employer and government contributions, and it will start (if at all) following the end of the furlough scheme. More information on the JSS is available in our furlough FAQs.
- This scheme has been postponed indefinitely. If reinstated, it would offer a £1,000 one-off taxable payment to employers for each eligible furloughed employee who is kept on. The grant does not have to be paid to the employee.
- Any businesses or self-employed people worried about tax payments due to coronavirus may be entitled to more time to pay. HMRC can waive late payment penalties and interest where a business experiences administrative difficulties paying taxes due to COVID-19.
- VAT-registered UK businesses may be eligible to defer payments. Businesses that deferred VAT may spread payments over the financial year 2021/2022 rather than paying in full at the end of March 2021. Businesses can make 11 equal instalments over 2021/22.
- Temporary suspension of wrongful trading rules to help company directors continue to trade during the COVID-19 period was in place for trading prior to 30 September. Directors should therefore ensure that they seek urgent advice from an accountant in the early stages to limit liability.
- From 25 March 2020, companies could apply online for a three-month extension for filing accounts at Companies House. This has now been modified and late filing deadlines are automatically extended until 5 April 2021.
- The proposed changes to IR35 has been postponed for one year as a result of COVID-19 but the legislation will still come into effect.
- The Statutory Sick Pay Rebate for SMEs to reclaim SSP due to coronavirus covers up to 2 weeks’ SSP per eligible employee.
- This scheme provides support for large businesses with a turnover of between £45m-£500m, offering access to loans and asset finance of up to £25 million.
- The Bank of England will buy short term debt from larger companies, to relieve cash flow pressure. It will operate for at least 12 months.
- This scheme provides support for small and medium-sized businesses with a turnover of up to £45m, offering access to overdrafts and asset finance of up to £5 million interest free for 12 months.
- Local authorities can offer one-off grants of £10,000 for eligible businesses, to help meet their ongoing business costs. This grant supports small businesses with a business premises that already pay little or no business rates because of small business rate relief, rural rate relief and tapered relief. The rateable value of the business premises must be less than £15,000.
- The 100% government-backed bounce back loans offer self-employed people and small businesses lending facilities between £2,000 and £50,000. This scheme has been extended until March 2021.
- Self Assessment payments on account, ordinarily due to be paid to HMRC by July 2020, are deferred until January 2021. Delayed Self Assessment payments can be paid back over an 11-month interest free period for those owing up to £30,000. See the 'Time to Pay' provisions.
- Self-employed individuals with profits of less than £50,000 can claim grants for three-month periods worth a varying percentage. For example, the third (November 2020) phase of the scheme offers grants equal to 80% of profits, up to a £2,500 monthly cap.
- A temporary ban on evictions for commercial tenants if they miss rental payments protecting them from the risk of eviction until the end of 2020.
- The government’s mortgage payment holiday scheme offers homeowners a three-month holiday on mortgage payments. This scheme has been extended into 2021.
- Some councils are supporting deferred payments for council tax.
- Businesses in these sectors who are adversely impacted by the restrictions in national lockdown or high-alert level areas may be entitled to additional funding. The government has given additional funds to local authorities to distribute to local businesses. Particular types of business, especially those in the leisure and hospitality sectors with physical premises, have priority. Local councils have discretion about how to spend this funding. In addition, a 100% business rates relief for retail, hospitality and leisure businesses should be available via local council websites.
- Local council payments of £500 may be available for those told to self-isolate in England who are on a low income, cannot work from home and will lose income as a result.
- The Minimum Income Floor in Universal Credit was suspended for everyone affected by the economic impact of coronavirus, so the self-employed could access Universal Credit at a rate equivalent to SSP for employees (approximately £94.25 per week). Universal Credit can be claimed without the normal requirement to attend a jobcentre, with access to advance payments for those directly affected by COVID-19 (or self-isolating).
- ESA is payable from the first day of sickness (rather than the eighth day) for people directly affected by COVID-19 and those who are self-isolating in accordance with government advice.
- Lockdown one-off top up grants for closed retail, hospitality and leisure businesses was announced on 5 January 2021 until Spring 2021 as follows: £4,000 for businesses with a rateable value of £15,000 or under, £6,000 for businesses with a rateable value between £15,000 and £51,000, £9,000 for businesses with a rateable value of over £51,000. Businesses which are legally required to close, and which cannot operate effectively remotely are eligible for the grant.
- Local Restrictions Support Grants (open and closed) apply to businesses closing or with reduced services due to temporary local restrictions. These covered local Tier 2, 3 or 4 restrictions. Eligibility is dependent on business rates, and the ‘closed’ grant requires closure for at least 14 days because of the restrictions. Businesses unable to provide usual in-person customer service are also covered, for example pubs and restaurants that could provide a takeaway-only service. Eligible businesses were expected to include hospitality, hotel, bed & breakfast and leisure businesses. Grants vary depending on whether the business could remain open or closed completely and included cash grants ranging from of £667 to £1,500 for each 14-day period the business is closed.
- The Additional Restrictions Grant provides local councils with grant funding to support closed businesses that do not directly pay business rates as well as businesses that do not have to close but which are impacted. Again, this was aimed at businesses which supply the retail, hospitality, and leisure sectors and those which do not pay business rates.
- Christmas support payments supported pubs that predominantly serve alcohol rather than provide food and were severely impacted over the festive season due to temporary local restrictions.
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