Self-Employment Support (SEISS) and Job Retention Scheme (CJSS) – [Update 26th Nov. 2020]

Self-Employment Income Support Scheme (SEISS) and Coronavirus Job Retention Scheme (CJSS) – [Update 26th Nov. 2020]

The third Self-Employment Income Support Scheme grant extension.

The eligibility criteria for the third SEISS grant have been further tightened. The rules have changed, and claimants need to consider them carefully before claiming from 30 November.

The Self-Employment Income Support Scheme grant extension provides critical support to the self-employed in the form of 2 further grants, each available for 3 month periods covering November 2020 to January 2021 and February 2021 to April 2021.

1. Who can claim

To be eligible for the grant extension self-employed individuals, including members of partnerships, must:

  • have been previously eligible for the Self-Employment Income Support Scheme first and second grant (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

No claim can be made where the reduced activity, capacity or demand is caused solely because the person is required to self-isolate, or care for a person required to self-isolate, as a result of travelling to the UK. 

2. What the grant extension covers

The extension will last for 6 months, from November 2020 to April 2021. Grants will be paid in 2 lump sum instalments each covering a 3 month period.

The third grant will cover a 3 month period from 1 November 2020 until 31 January 2021. The Government will provide a taxable grant calculated at 80% of 3 months average monthly trading profits, paid out in a single instalment and capped at £7,500 in total. This is an increase from the previously announced amount of 55%.

The Government has already announced that there will be a fourth grant covering February 2021 to April 2021. The Government will set out further details, including the level, of the fourth grant in due course.

The grants are taxable income and also subject to National Insurance contributions.

3. How to claim

The online service for the next grant will be available from 30 November 2020. HMRC will provide full details about claiming and applications in guidance on GOV.UK in due course.

Key dates for Coronavirus Job Retention Scheme

We have a round-up of key deadlines and dates for the extended furlough scheme, including dates for submission of claims.

The Coronavirus Job Retention Scheme (CJRS) has been extended to 31 March 2021 for all parts of the UK, but the scheme changed from 1 November 2020 making many more people eligible.

1 November 2020 From this date the government will pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month.

For periods from 1 November onwards, employers and employees do not need to have benefited from the scheme before to claim.

Claims can be made for those employed on 30 October 2020, provided an RTI submission had been made between 20 March 2020 and 30 October 2020 notifying a payment of earnings for the employee.

Claims for periods starting on or after 1 November must be submitted within 14 calendar days after the month they relate to unless this falls on a weekend, in which case the deadline is the next weekday.

30 November 2020 - This is the last day on which employers can submit or change claims for periods ending on or before 31 October 2020.

From December 2020 - HMRC will publish the names, an indication of the value of claims and, for companies and LLPs, the Company Registration Numbers of employers who make CJRS claims for periods from December.

1 December 2020 - For claim periods from 1 December, employers cannot claim CJRS grants for any days that their employee is serving a contractual or statutory notice period, including notice of retirement or resignation.

14 December 2020 - In line with the new monthly deadlines for claims, this is the last day for submitting any claims for November.

January 2021 - Government to review the terms of the scheme.

31 March 2021- CJRS ends.

Virtual Christmas parties.

Annual function exemption of £150 per attendee

Employers can take advantage of the annual function exemption, which means no tax or national insurance contributions are payable on costs relating to annual social events organised for employees. 

There’s a limit of £150 per attendee (including non-employee guests) each year and if this limit is breached, the employer must cover the tax and NIC for all of the costs, not just the breach. The exemption considers all end-to-end costs for the event including VAT.

For an event to be eligible for the exemption, it must be open to all employees to attend, or, alternatively, if there are several events (by location or office), all employees should be able to attend one. 

Social distancing restrictions in place mean that a physical event is unlikely for any but the smallest of organisations. Given the current situation, a pragmatic approach suggests that an online meeting would qualify as a location. 

Furthermore, a structured social event incorporating the traditional elements of a Christmas party is more likely to be able to meet the requirements for the exemption. For example, if food, drink and entertainment are provided.

Trivial benefits rule

Under the trivial benefits rule employers can provide a gift up to the value of £50 including VAT without paying tax on the item. To qualify the gift cannot be cash (or a voucher that can be exchanged for cash) and it cannot be in exchange for work or performance. 

Best of both situation - Both benefits

The two exemptions can work alongside each other, so employees can be invited to a Christmas party, allowable under the annual function exemption and also be given £50 of, say, gift vouchers, covered by the trivial benefits exemption.

Please do not hesitate to contact Aaron Associates on 020 86650767.