SME: SOS is a free resource to empower small businesses with the latest information & help available to them, and lots of you have been in touch asking me about the furlough scheme! So, I’ve created this handy guide to give you an overview of everything you need to know!
The Coronavirus Job Retention scheme allows employers to put staff who can’t work because of coronavirus on ‘furlough’ – or ‘on hold’ – and the Government will cover 80% of their salary, up to £2,500 per month, for at least 3 months starting from 1 March 2020.
Think of this like pressing pause on your team’s jobs during the crisis, when you might not have a need for them, and then when it’s over you press play and they’re ready to get back to work and kickstart the economy!
You can furlough someone if:
- You have no work for them to do
- They are looking after children
- They are self-isolating
Who is eligible?
- Furloughed employees must have been on your PAYE payroll on 28 February 2020.
- They can be on any type of contract, including employees that are: full-time, part-time employees, on agency contracts, on flexible or zero-hour contracts.
- Sole-employee limited company directors, who pay themselves a small salary by PAYE & top that up with dividends can furlough themselves but there is no support for dividends.
How to apply?
- Discuss with your staff & make any changes to their employment contract by agreement.
- Write to your employee confirming furlough & keep a record of this communication.
- Calculate the amount you are claiming – HMRC will retain the right to retrospectively audit all aspects of your claim.
- The online service for claiming is NOT yet available – hopefully it will be by end of April 2020 but use this time to get prepared.
Some need to knows:
- The scheme also covers employees who were made redundant since 28 February 2020, if they are rehired by their employer.
- When on furlough, an employee can not do any work for you.
- Employees hired after 28 February 2020 cannot be furloughed or claimed for in accordance with this scheme.
I want to stress that the Government is not trying to catch you out with this! They want to stand by businesses, who stand by their employees & understand they’ll be lots of reasons why people can’t work at the moment.
Join me everyday on Instagram for my Daily Bulletin and to access SME: SOS resources and community, please head to @hollytucker for all the latest information and follow the conversation with #SMESOS
Rightly so, there’s been so much talk about how and if small business founders are eligible for the Government’s schemes. So I am here to demystify it all, make sure that you get clued up on all key things you should.
And remember, the Government wants you to claim – it’s not trying to catch you out!
What is the Self-Employed Income Support Scheme?
- A taxable grant worth 80% of average profits over the last three years, up to a maximum of £2,500.
- You must earn more than half of your total income from self-employment with trading profits up to £50,000.
- It is open for three months, but it will be extended for longer if necessary.
- Only those with a tax return for 2019 are eligible.
- Anyone who missed the deadline for submission has an extra four weeks!
- It will be up and running by the beginning of June.
What is the Coronavirus Job Retention Scheme?
- If you’re a company director and pay yourself a salary or dividends you are not covered by the Self-Employed Income Support Scheme, BUT you could get support through the Coronavirus Job Retention Scheme for employees, if you operate pay-as-you-earn scheme.
- You will be able to claim 80% of your monthly salary, up to £2,500 a month.
- You can not then work for the firm, but you can continue to perform your statutory obligations a the Director such as official legal filings.
- The online service you will use to claim is not available yet. The Government expects it to be available by the end of April 2020.
How can I access the Coronavirus Business Interruption Loan Scheme?
- The temporary Coronavirus Business Interruption Loan Scheme is open to self-employed people and offers access to loans, overdrafts, invoice finance and asset finance of up to £5 million for up to six years.
- The Government could also give you a ‘business interruption payment’ to cover the first 12 months of interest and fees on the loan.
- The scheme is now open for applications, and is offered by all major banks.
What about deferring income tax payments?
- If you have income tax payments due in July 2020 under the self-assessment system, you can defer them until January 2021.
What on earth is Universal Credit?
- Universal Credit is a monthly payment to help with your living costs. You may be able to get it if you’re on a low income or out of work.
However hard it feels right now, I believe in you and know that you can do it. Please just double, triple check all that is out there. The Government is not trying to ‘catch you out’ the opposite – it is wanting you to claim if you can.
To access more SME: SOS resources and the community, please head to @hollytucker for all the latest information and follow the conversation with #SMESOS