WHAT HELP ARE YOU ELIGIBLE FOR?
In recent weeks we have seen some significant changes to the Covid-19 crisis support that is available to businesses in Northern Ireland.
The existing Coronavirus Job Retention Scheme (CJRS) has been extended until 31 March 2021; to be reviewed at 31 January 2021.
- A Job Retention Bonus for employers – this has now been postponed following the Chancellor’s announcements of 5 November 2020.
- The Job Support Scheme has been postponed – details to be confirmed following Chancellor’s announcements of 5 November 2020.
- The Localised Restrictions Support Scheme has been introduced to support Northern Ireland businesses which have had to close or have been severely restricted by restrictions put in place by the NI Executive.
- The Covid Restrictions Business Support Scheme is designed to support businesses that have been severely impacted by restrictions but who are not eligible for the Localised Restrictions Support Scheme.
- The Self Employed Income Support Scheme has been extended and level of support increased.
Coronavirus Job Retention Scheme Extended
Following the Government’s recent introduction of increased restrictions in England, the Coronavirus Job Retention Scheme has been extended until 31 March 2021, to be reviewed at 31 January 2021. The cost to employers of retaining staff under the extended scheme is less than it was from September to November under the old scheme, with the level of government support being at a similar level to that in August
How it operates
- This extended Job Retention Scheme will operate as the previous scheme did, with businesses being paid upfront to cover wages costs;
- 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 only for the hours the employee does not work;
- As under the previous CJRS, flexible furloughing will be allowed in addition to full-time furloughing;
- Further details, including how to claim this extended support through an updated claims service, will be provided shortly.
- To be eligible to be claimed for under this extension, employees must have been on an employer’s PAYE payroll at 23:59 30th October 2020;
- Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees;
- Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Such calculations will broadly follow the same methodology as currently under the CJRS;
- When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days;
- Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period;
- For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.
- For hours not worked by the employee, the government will pay 80% of wages up to a cap of £2,500. The grant must be paid to the employee in full;
- Employers will pay employer NICs and pension contributions, and should continue to pay the employee for hours worked in the normal way;
- As with the current CJRS, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
The Government will confirm shortly when claims can first be made in respect of employee wage costs during November, but there will be no gap in eligibility for support between the previously announced end-date of CJRS and this extension.
Job Retention Bonus
The Job Retention Bonus is a one-off taxable payment of £1,000 to the employer, for each eligible employee that was furloughed and kept continuously employed. Following the Chancellor’s latest announcements on November 5 2020, the Job Retention Bonus has been postponed and a similar incentive will be released at the appropriate time.
Job Support Scheme
Following the extension of the Coronavirus Job Retention Scheme (CJRS) the Job Support Scheme (JSS), which was originally intended to open on 1 November 2020, has been postponed. Details of timing to be confirmed following Chancellor’s latest announcements on 5 November 2020.
The JSS is more flexible that CJRS to enable businesses to get the right level of support according to their situation.
Employers facing decreased demand (JSS Open)
JSS Open is designed for business that can operate safely but continue to face reduced demand. JSS Open gives employers the option of keeping their employees in a job on shorter hours rather than making them redundant.
- the employee will need to work a minimum of 20% of their usual hours;
- the employer will continue to pay them as normal for the hours worked;
- the employee will receive 66.67% of their normal pay for the hours not worked – this will be made up of contributions from the employer and from the government;
- the employer will pay 5% of reference salary for the hours not worked, up to a maximum of £125 per month, with the discretion to pay more than this if they wish;
- the government will pay the remainder of 61.67%, of reference salary for the hours not worked, up to a maximum of £1,541.75 per month. This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.
Businesses that are legally required to close their premises (JSS Closed)
JSS Closed is designed for businesses that have been legally required to close their premises as a direct result of coronavirus restrictions.
Each employee who cannot work due to these restrictions will receive two-thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month, although their employer has the discretion to pay more than this if they wish.
It is possible for employers to claim the JSS Open and JSS Closed grant at the same time for different employees. However, an employer cannot claim for a single employee under both schemes at the same time.
Organisations that have staff costs that are fully publicly funded (even if they are not in the public sector), should use that money to continue paying their staff, and not use the Job Support Scheme.
Organisations can use the scheme if they are not fully funded by public grants, for the proportion of their revenue disrupted due to coronavirus. They should contact their sponsor department or respective administration for further guidance.
Those that do claim should do so using the same process as all other employers.
Eligible employers will be able to claim the Job Support Scheme grant for employees who:
- were on their PAYE payroll between 6 April 2019 and 11:59pm on 23 September 2020. An RTI Full Payment Submission notifying payment in respect of that employee must have been made to HMRC at some point from 6 April 2019 up to 11:59pm 23 September 2020;
- were in their employment on 23 September 2020. If employees ceased employment after 23 September 2020 and were subsequently rehired, then employers can claim for them.
Employees do not need to have been furloughed under the Coronavirus Job Retention Scheme to be eligible for the Job Support Scheme.
Employers are eligible to claim the JSS Open if:
- an employer with 250 or more employees on 23 September 2020 has undertaken a Financial Impact Test demonstrating their turnover has remained equal or fallen to show they have been adversely affected due to coronavirus; an employer with less than 250 employees on 23 September 2020 is not required to satisfy the test;
- some, or all, of their employees are working reduced hours – employees must still be working for at least 20% of their usual hours.
Other points to note:
- Employees can do training in working hours while being claimed for under the Job Support Scheme. Hours that employees spend training are paid for by the employer at their full rate of pay and will count towards 20% of their usual hours;
- Employees are entitled to the National Living Wage, National Minimum Wage or Apprentices Minimum Wage for the hours they are working or treated as working (such as training undertaken at the request of the employer in non-working hours) under minimum wage rules. For JSS Open, at least minimum wage rates must be paid for all hours worked or treated as worked;
- Employers must have reached written agreement with their employee that they have been offered a temporary working agreement. The agreement must be available for view by HMRC on request. This temporary working agreement must cover at least seven consecutive days
- Employers should discuss with their staff and make any changes to their employment contract by written agreement. When employers are making decisions, including deciding to whom they should offer reduced hours, equality and discrimination laws will apply in the usual way;
- Employers must maintain records relating to the terms of the temporary working agreements for each employee, and make sure that the agreement is consistent with employment, equality and discrimination laws;
- Keep a written record of the agreement for 5 years;
- Keep records of how many hours employees work and the number of usual hours they are not working;
- Agreements must be made available to HMRC on request.
Employers are eligible to claim JSS Closed if their business premises at one or more locations has been legally required to close as a direct result of coronavirus restrictions. This includes premises restricted to delivery or collection only services from their premises and those restricted to the provision of food and/ or drink outdoors.
Businesses premises required to close as a result of specific workplace outbreaks are not eligible for this scheme.
Employers are only eligible to claim for periods during which the relevant coronavirus restrictions are in place. Employers will not be able to claim JSS Closed to cover periods after restrictions have lifted and the business premises is legally allowed to reopen. They may then be able to claim JSS Open if they are eligible.
Eligible employers will be able to claim the JSS Closed grant for employees:
- whose primary workplace is at the premises that have been legally required to close as a direct result of coronavirus restrictions set by one or more of the four governments of the UK;
- that the employer has instructed to and who cease work for a minimum period of at least 7 consecutive calendar days.
Other points to note:
- Employers should make any changes to employment contracts by written agreement. When employers are making decisions in relation to the process, including deciding who they should instruct to cease work, equality and discrimination laws will apply in the usual way;
- Employers must have reached written agreement with their employee that they have been instructed to and agree to stop working for a minimum of 7 consecutive calendar days. The agreement must be available for view by HMRC on request;
- Employers must maintain records relating to the terms of these arrangements for each employee. They must notify the employee of the agreement in writing and make sure that the agreement is consistent with employment, equality and discrimination laws;
- Keep a written record of agreements for 5 years;
- Agreements must be made available to HMRC on request.
Employers cannot claim for an employee who has been made redundant or is serving a contractual or statutory notice period during the claim period.
The government expects that large employers (250 or more employees) and their corporate groups using the scheme will not make capital distributions whilst claiming the Job Support Scheme grant. This includes:
- free or other distribution
- any equivalent payment that a partnership may make to its partners
Paying employee taxes and pension contributions
The Job Support Scheme grant will not cover National Insurance contributions (NICs) or pension contributions. These contributions remain payable by the employer.
When you can claim
Employers will be able to make their first claim from 8 December 2020. Employers will be able to claim from 8 December, covering salary for pay periods ending and paid in November. Subsequent months will follow a similar pattern, with the final claims for April being made from early May.
The Localised Restrictions Support Scheme (LRSS)
This Scheme provides financial support to businesses that have had to close or severely limit operations from their premises due to restrictions that have been put in place by the NI Executive.
Businesses that the Scheme will apply to include:
- Cafes, pubs and restaurants that are required to close or limit their services to a takeaway service instead;
- Hotels, guesthouses and registered bed & breakfasts that have been required to limit the provision of services for residents only;
- Close contact services occupying commercial premises such as hairdressers and beauty salons; and
- Other businesses that are required to cease such as campsites, cinemas, indoor visitor attractions etc.
Businesses need to apply for this support and payments are only issued when an online application for the relevant business premises has been submitted and is found to be eligible for the support payment according to the scheme’s criteria.
If a business occupies more than one eligible premises, it can apply for support in respect of each one. A separate online application must be submitted for each separate premises that is considered to be eligible for support.
There are three eligibility criteria:
- The business must occupy a property within Northern Ireland;
- The business must fall into one of the relevant business categories;
- The business must have been open to the public and trading at the start of the restriction period set by the Health Protection Regulations (unless the applicant business is a wet pub which serves drink only).
Certain business are excluded including:
- Public sector bodies;
- Businesses which have failed to comply with a COVID-19 prohibition notice served by the PSNI;
- Off-licences and supermarkets selling alcohol solely restricted by closure times;
- Premises solely restricted by latest ordering time of 11pm on takeaway orders.
Level of Support
The level of support available is based on the rateable value (NAV) of the property from which the business operates:
Lower rate: £800 for each week that the restrictions apply for:
- a business that is the sole occupant operating from a property with an NAV of £15,000 or less;
- a guesthouse or bed & breakfast with a capital value (which means it is valued as a domestic property for rates); or
- a business that is the occupier of a part of a property which is restricted with any NAV.
Standard rate: £1,200 for each week that the restrictions apply for:
- a business that is the sole occupant of a property with an NAV between £15,001 and £51,000;
Higher rate: £1,600 for each week that restrictions apply for:
- A business that is the sole occupant of a property with an NAV of £51,001 or more.
Covid Restrictions Business Support Scheme (CRBSS)
This Scheme was announced by the Minister for the Economy and is designed to provide support for those businesses that are not able to access support through existing schemes.
The Scheme operates in two parts:
- Part A is for a business that is required to close or cease trading but is not eligible for the LRSS;
- Part B is for a business that has not been forced to close, but is part of the direct supply chain to a business that is forced to close and as a result it has been severely impacted.
Under Part A eligible businesses will receive a grant equivalent to £600 for each week the regulations are in place. The grant will be paid in one lump sum and applications can now be made online.
Further information on Part B is due to be released soon.
Part A is open to any business that can meet the following criteria:
- A business named within the regulations as required to close/cease trading but is not eligible for the LRSS. Examples of this might include a business that delivers its product or service on a mobile basis or operates from their home, or their customers’ homes, for example, a driving instructor or mobile hairdresser or beautician;
- A business operating in Northern Ireland and was trading at the time the restrictions came into effect on 16 October 2020 (or 5 October 2020 for Derry City and Strabane District Council areas);
- The income lost as a result of the business having to close or cease trading accounts for more than 50% of the applicant’s income.
The CRBSS is administered by Invest NI.
Self Employed Income Support Scheme
The Self-Employment Income Support Scheme has been extended from 1 November 2020. This will provide critical support to the self-employed in the form of two grants, each available for three month periods covering November 2020 to January 2021 and February 2021 to April 2021.
To be eligible for the Grant Extension self-employed individuals, including members of partnerships, must:
- have been eligible for the first and second grants under the Scheme (although they do not have to have claimed the previous grants);
- declare that they intend to continue to trade and either:
– are currently actively trading but are impacted by reduced demand due to coronavirus;
– were previously trading but are temporarily unable to do so due to coronavirus.
Grants will be paid in two lump sum instalments each covering a three-month period. The first grant will cover 1 November 2020 until 31 January 2021. The Government will provide a taxable grant covering 80% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £7.500 in total. This is an increase from the previously announced level of 55%.
The second grant will cover a three-month period from 1 February 2021 until 30 April 2021. The government will review the level of the second grant and set this in due course.
The grants are taxable income and also subject to National Insurance contributions.