Job Retention Scheme

On Friday 20 March 2020 a Coronavirus Job Retention Scheme was announced by the Chancellor of the Exchequer, Rishi Sunak. This scheme, which is available to any employer in the country, allows employers to contact HMRC for a grant to cover 80% of salaries up to a total of £2,500 a month per employee. The scheme covers the cost of wages backdated to 1 March 2020 and will be open initially for at least three months with the first grant to be paid ‘within weeks’. For more information, see LNB News 20/03/2020 97 and Practice Note: Coronavirus job retention scheme.

The Coronavirus Job Retention Scheme does not apply to those who are self-employed. Measures announced by the government in respect of the self-employed and whose income has been affected included that they may delay the next self-assessment tax payment until January 2021, they may defer VAT payments due to HMRC between 20 March and 30 June 2020, and they may claim universal credit at a rate equivalent to that of statutory sick pay for employees (ie £94.25 per week currently and £95.85 from 6 April 2020). However there were increased calls, including by the TUC, for there to be more government support for the self-employed.

In order to address the concerns of the self-employed, an amendment to the Coronavirus Bill was put forward on Monday 23 March 2020 by a group of MPs led by the Liberal Democrat MP, Munira Wilson, which would have required the government to ‘top up’ the earnings of the self-employed to the lower of 80% of their net monthly earnings averaged over three years, or £2,917. However that proposed amendment was not adopted and the Bill received Royal Assent on Wednesday 25 March 2020 to become the Coronavirus Act 2020 without that provision.

Source: LexisNexis