Budget 2021: Furlough Scheme and SEISS
As it was widely predicted the Chancellor has announced today that the furlough scheme has been extended to 30 September 2021.
Employees will continue to receive 80% of their salary for hours not worked. The scheme will remain unchanged until July 2021 when employers will be asked to contribute 10% to the payment of salaries. This will increase to a 20% employer contribution in August 2021. This will provide businesses with the flexibility and stability needed for the next few months.
Self Employment Income Support Grant (SEISS)
The Chancellor has also announced that there will be a fourth and fifth grant available to the self employed providing much needed support to the self employed who continue to be affected by the Coronavirus. It will also be welcome news to those unable to claim under the previous scheme as they were newly self employment.
The fourth and fifth grants will be available for those who submitted 19/20 tax returns by 2 March 2021 meaning that you may be able to claim if you were not eligible for previous grants.
The fourth grant provides support for the period between February 2021 to April 2021. For all eligible applicants, the grant will be 80% of three months average trading profits, capped at £7,500. The grant will be available to claim from late April.
The fifth grant provides support between May and September of this year. If eligible for the grant, a business who has suffered more than a 30% reduction in turnover will receive 80% of three months average trading profits. If a business has suffered less than a 30% reduction in turnover, they will be entitled to 30% of three months average trading profits.
To be eligible for either of the grants you must have experienced a significant financial impact from coronavirus. As with previous grants, trading profits must be no more that £50,000 and at least equal to non-trading income.
The calculation does now however take into account 19/20 profits being based on average profits between 2016 and 2020.
Find out more
Visit our Budget 2021 hub for our latest commentary and to pre-order our exclusive Budget Summary and Tax Card.