Supporting and Retaining Staff
What about support for businesses to retain staff?
In order to support business who may be struggling to afford to pay staff while businesses are closed, the government has introduced the Coronavirus Job Retention Scheme.
The scheme is open to all businesses and means that the government will pay 80% of furloughed workers’ wage costs up to £2,500 per month. In order to claim you will need to:
- Designate affected employees as ‘furloughed workers’ and notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
- Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required).
Government has announced that the scheme will now cover the cost of employer national insurance and pension contributions on top of 80% of wages.
Where organisations receive public funding for staff costs (e.g. through Sport England), and that funding is continuing, the government expects this money to continue to pay staff and staff should not be furloughed.
Employees who are furloughed can continue to volunteer or take part in training, as long as they do not provide services to or generate revenue for your organisation. Guidance for employees can be found here.
The government has announced a number of changes to the Job Retention Scheme, requiring employers to contribute towards the cost of the scheme. From August, employers will be required to pay national insurance and pension contributions of furloughed workers. From September, employers will be asked to contribute 10% of an employee’s wage, with the government contributing 70%.
For the final month of the scheme in October, the employer contribution will rise to 20% and the government contribution to 60%. Therefore, throughout this period furloughed employees will continue to receive 80% of their wage up to £2,500 per month. From July the scheme will also offer flexibility to allow furloughed employees to return to work on a part-time basis, whilst still receiving support for the hours they are not working.
The Job Retention Scheme is now open for applications. To apply for wages through the scheme please click here. The Scheme is currently due to run until the end of October.
To find out the full range you government support you may be able to receive, you can use the government’s support finder tool.
How can I support my employees to work remotely?
We recognise that social distancing has meant that many of you have been forced to ask your staff to work from home for the foreseeable future.
The Alliance has created templates to help you with this transition and to provide a best practice support resource for your HR team.
We also know that working remotely could have an adverse impact on mental health. The Alliance has a number of fantastic resources that can help in this area.
We have tips for everyday living, information on workplace wellbeing and guidance on terminology.
Support for Self-employed Workers
What support is available for self-employed workers?
On 26 March the Chancellor announced a new Self-employment Income Support Scheme (SEISS) to support self-employed individuals (including members of a partnership) who have been impacted by coronavirus.
Those with average profits of £50,000 or less will be eligible for taxable grants worth 80% of their average profits over the last three years, up to £2,500 per month. The government have published guidance on how HMRC will calculate total income and trading profits.
The scheme will be open to those who earn the majority of their income from self-employment. If they are able to, individuals will also be able to continue doing work whilst also claiming this grant.
On 29 May, the Chancellor announced that the SEISS would be extended and those eligible would receive a second grant covering three months’ worth of average monthly profits. However, the value of the second grant will be worth 70% of average profits, up to a total of £6,570. Applications for the second grant are due to open in August.
Guidance on claiming a grant under SEISS can be found here.
HMRC are intending to use existing records to identify those who are eligible and contact them directly with details of how to apply.
In addition, in his announcement on 20 March the Chancellor announced that he was suspending the minimum income floor for everyone affected by the economic impacts of coronavirus. This means the self-employed can now access Universal Credit at a rate equivalent to Statutory Sick Pay for employees.
In addition, support for rental costs may be available through Universal Credit. You can find out more about claiming Universal Credit here. You can access Universal Credit whilst also receiving a SEISS grant.
The Chancellor also announced that the next self-assessment payments will be deferred until January 2021.
What support can I get with paying my mortgage?
The government have announced that homeowners and those with buy-to-let mortgages who are suffering financial difficulties due to COVID-19 will be able to apply for a three-month mortgage payment holiday. To discuss the option of a mortgage holiday, it is suggested you contact your mortgage provider.
Further information is available on the UK Finance website here.