Paul Kelly, Head of Employment law at Blacks Solicitors, discusses the fourth instalment of the Self Employment Income Support Scheme (SEISS) and the ongoing furlough scheme.
Set out on 03 March 2021 by Chancellor of the Exchequer Rishi Sunak, the Government’s spring Budget 2021 focused on the emergence from our third national lockdown and recovery from the impact of the coronavirus pandemic.
In particular the Budget emphasised restarting the economy and providing a significant boost for businesses and workers struggling as a result of Covid-19.
SEISS
The SEISS provides taxable grants to self employed people whose businesses have been affected by Covid-19.
The fourth SEISS grant will be available to claim from the end of April via the Government website. The grant is one of two grants to be offered by the Government later this year, with a fifth grant expected to cover May to September 2021.
Self-employed people (including members of a partnership) can claim for this grant of 80% of three month’s average trading profits, capped at £7,500. Eligibility will initially be worked out with reference to a claimant’s 2019/20 self-assessment tax return. Claimants must have traded in the 2019/20 and 2020/21 tax years, be currently trading but affected by COVID-19 (or temporarily prevented from trading due to COVID-19), and confirm that they intend to continue to trade or that there will be a significant reduction in profits due to COVID-19.
The previous schemes have only been eligible to individuals who met certain criteria. They have been criticised for failing to assist those who became self-employed after 5 April 2019. The fourth grant is now open for individuals who became self-employed during the 2019 to 2020 tax year. Other than this, the eligibility criteria is the same.
Further guidance is expected from the Government in due course about applying for the fourth SEISS grant.
Furlough
Furlough applies across the UK and covers up to 80% of an employee’s salary for the hours they can’t work, up to a maximum of £2,500 per month.
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Furloughed employees will continue to receive up to 80% of their pay for hours not worked while the scheme continues. From July, the government will contribute 70%and employers will have to pay 10% for hours not worked. In August and September the government will pay 60% and employers 40%.
The furlough scheme has been extended several times since it was introduced in March 2020 for a period of three months, and it’s entirely conceivable that the Government could extend it further.
The most likely cause of a further extension would be if the government implemented another lockdown or prevented certain sectors from fully opening to stop the spread of COVID-19. Given the current roadmap, it’s hoped that the economy will be up and running before the current version of the scheme ends and that businesses will be able to bring back furloughed workers in good time. However, if the recovery is sluggish, the government may be minded to extend the scheme further to give businesses (particularly in the hospitality sector) breathing space.
For more information on furlough, SEISS, or another employment law matter, please visit https://www.lawblacks.com/personal/employment-law/.
