The government has announced a range of extraordinary measures to try and prop up the UK economy and safeguard jobs during the COVID-19 lockdown. There are business interruption loan schemes to help firms secure funding, VAT deferrals to aid cashflow issues and special schemes for organisations including charities, tech start-ups and the arts. The importance of the Coronavirus Job Retention Scheme was underlined when 140,000 companies applied to claim wages for over one million UK employees on the day it was launched.
Here, we analyse the Coronavirus Job Retention Scheme and offer some practical guidance on applying for it.
What is the Coronavirus Job Retention Scheme?
The Coronavirus Job Retention Scheme (CJRS) is a temporary scheme open to all UK employers. It offers salary support from 1 March 2020 and will stay open until at least the end of June, after this date to the end of October the government contribution is likely to change (however the details are yet to be announced) The CJRS aims to encourage employers who cannot pay staff wages to not make redundancies. Instead, they can keep employees on the payroll and claim a government grant to cover some of the wage cost.
- The state pays your employer 80% of your salary, up to £2,500/month. The scheme opened to employers on Monday 20 April, with the first payments being made within six working days – so your employer should have the cash by the end of the month.
- You need to have been on your employer's payroll on 19 March 2020. When the scheme was launched, it applied to those on their employer's payroll by 28 February 2020. However, the Treasury extended the scheme to include people who were on a company's payroll on 19 March 2020.
Coronavirus Self-Employment Income Support Scheme
Under this scheme, self-employed workers will be able to apply for taxable grants to combat a loss of income due to the coronavirus pandemic. Here's how it'll work and some eligibility criteria:
- The grants are worth up to 80% of your profits. This is capped at £2,500 a month and is taxable. As it's a grant, it means you don't have to pay it back.
- Grants are decided on your profits over the last three years.
- You must have filed a tax return for 2018/19. This means you must have been self-employed prior to 6 April 2019. The last possible moment to file a 2018/19 tax return was Thursday 23 April (the deadline had been extended from 31 January 2020). If you only had a few months' self-employment on your 2018/19 return, this will be counted as your total profit for the year – the Government won't pro-rata it based on your monthly profits.
- You must earn more than 50% of your total income from self-employment. This must have been the case for either your 2018/19 tax return or, if not, the average of your 2016/17, 2017/18 and 2018/19 tax returns.
- Your average trading profit must be less than £50,000/year.
infomation courtesy of The Vice Accountant who is an experienced financial advisor and tax accountant for those working in the adult industry sector Follow on Twitter @ViceAccountant Profile: Click HERE for more info
