Ask ICAS webinar 1: COVID-19 employed and self-employed support
Here are some key takeaways from the first Ask ICAS webinar which covered coronavirus employed and self-employed support.
The webinar is now available to view on-demand.
Ask ICAS Webinar: Coronavirus Employed and Self-Employed Support
Job Retention Scheme (JRS) and furloughing employees
Justine Riccomini, Head of Tax (Employment Taxes, Scottish Taxes and Tax Community), covered the government Job Retention Scheme (JRS) and furloughing employees.
Key points on JRS:
- The scheme was announced by the Chancellor on 20 March 2020 and covers any employer “severely affected” by C-19 qualifies for government funding.
- The funding will be available to be claimed from the end of April 2020 and should be in place by the end of June 2020 and is based on the employees in post on 28 February 2020.
- The scheme is intended to run from 1 March 2020 to 31 May 2020, but this will be reviewed and extended where necessary.
- The payments are taxable
- HMRC has produced basic guidance for employers and employees.
- Separate guidance for the self-employed has also been published.
- Any UK organisation with employees and a UK bank account can apply.
- Bonuses, fees and commission are specifically excluded from the JRS.
- Making a claim for JRS grants will require employers to run the payroll as usual, submit the FPS in the Real Time Information system, and then run a separate set of calculations.
- An HMRC portal for this purpose is due to go live at the end of April 2020.
Key points on furloughing employees:
- The government is offering to pay capped, non-repayable grants covering 80% of basic salary or £2,500 per month.
- Employer's NICs and the value of minimum Auto-Enrolment pension contributions applicable to that payment will also be covered.
- The maximum JRS grant will be based on a salary cost of £37,500 per annum/£3,125 per month per employee.
- Employees will not be allowed to work during furlough, although there are some exceptions for emergency volunteering.
Self-employment income support scheme
Jeremy Clarke CA, Assistant Director, Practice, gave an update on the Self-employment Income Support Scheme
- This is a non-repayable grant for sole traders and partnerships.
- This will be 80% of the 80% of the average profits from the 2016/17; 2017/18 and 2018/2019 tax years (where applicable).
- Similar to JRS, the payments are taxable.
- The payment is calculated on the basis of 80% of the average profits from the 2016/17; 2017/18; and 2018/19 tax years (where applicable).
Key points on eligibility:
- An individual that has submitted an Income Tax Self Assessment tax return for the tax year 2018-19 by 23 April 2020; and
- traded in the tax year 2019-20; and
- are trading when they apply, or would be except for COVID-19; and
- intend to continue to trade in the tax year 2020-21; and
- have lost trading/partnership trading profits due to COVID-19.
In addition to the above, eligible individuals must have at least one of the following:
- Trading profits/partnership trading profits in 2018-19 of less than £50,000; or
- average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and;
- these profits constitute more than half of their average taxable income in the same period.