This guide outlines the key facts you need to know about furlough
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)
- TAX AND REBATES:
- Time to pay scheme (for income and corporation tax)
- Valued Added Tax (VAT) Deferral
- Three-month extension for filing accounts
- Statutory Sick Pay Rebate
- Support for the self-employed:
- 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
Details of the scheme
- The Coronavirus Job Retention Scheme (furlough scheme) will close on 30 September 2021. In July 2021 the government will contribute 70% and employers will have to pay 10% for hours not worked plus NICs and pension contributions. In August and September the government will pay 60% and employers 20% plus NICs and pension contributions. More information on the CJRS is available in our furlough FAQs.
- Any businesses or self-employed people worried about tax payments due to coronavirus may be entitled to more time to pay. HMRC may waive late payment penalties and interest where a business experiences administrative difficulties paying taxes due to COVID-19. An agreement reached with HMRC for this is called a Time to Pay Agreement (TTPA) although HMRC may require financial information to support a TTPA request which should be made in advance of payment deadlines.
- VAT-registered UK businesses may be eligible to defer payments under the New Payment Scheme. 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.
- Companies could apply online for a three-month extension for filing accounts at Companies House. Late filing deadlines were automatically extended until 5 April 2021. Although the automatic extensions have come to an end for accounts filing deadlines that fall after 5 April 2021 businesses may be able to apply for a 3-month extension due to issues around COVID-19 if an extension application is made before the deadline otherwise a late filing penalty may apply.
- The Statutory Sick Pay Rebate for SMEs to reclaim SSP due to coronavirus covers up to 2 weeks’ SSP per eligible employee.
- Self-employed individuals with profits within certain limits may be able to claim grants for three-month periods worth a varying percentage and may be able to defer payments on account. The fifth grant will be available from late July until 30 September 2021. The amount of the grant will depend upon whether turnover is down by more or less than 30%.
- The government’s mortgage payment holiday scheme offers homeowners a three-month holiday on mortgage payments. This scheme has been extended into 2021. for those who applied before 31 March 2021. After that date lenders have to offer tailored support dependent on individual financial circumstances including payment deferrals or reductions, longer-term measures such as changing mortgage type such as interest only or length of mortgage term.
- 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 Universal Credit standard allowance was increased by £20 a week in response to the pandemic which has been extended until the end of September 2021. The Minimum Income Floor in Universal Credit was also 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. This applies until the end of July 2021.
- 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 during the previous Tier 2, 3 or 4 restrictions. Eligibility was 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.
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