Coronavirus Update May 29th 2020
The Government’s support for the Coronavirus pandemic was again extended and an announcement on the 29th of May 2020 was made by Chancellor Rishi Sunak, detailing an extension to the Self-Employment Income Support Scheme and Coronavirus Job Retention Scheme.
Rishi Sunak announced that the Self-Employed Income Support Scheme will be extended with a second payment that can be applied for at the start of August. The second grant will be at 70% of the self-employed earnings capped at £6570 for three months.
The Coronavirus Job Retention Scheme will also be extended until the end of October, but there will be a tapering off on the amounts that will be paid to the employer with them expected to make a contribution to the employees wages. This will be as follows.
For August, the Government will pay 80% of the wages up to a cap of £2500, but the employer will pay Employer NICS and pension contributions. This will be a total of 5% of the costs had the employee not been furloughed.
For September, the Government will pay 70% of the wages up to a cap of £2187.50. The employer will pay the Employer NICS and Pension costs, representing a cost of 14% of the employment costs had the employee not been furloughed.
For October, the Government will pay 60% of the wages up to a cap of £1875. The employer will pay the Employer NICS and the Pension costs, representing a cost of 23% had the employee not been furloughed.
There were also slight updates to the Bounce Back loan scheme in that digital only banks Tide and Starling have been added to the list of approved lenders. Although Starling Bank at the time of writing are operating a waiting list for applications that is currently a week-long, with further time for processing whilst the money is deposited in the bank account.
One concern is that there are reports that 40-50% of borrowers will default on the bounce back loans that they have taken, so far on the 1st of June 2020, £18.5bn has been leant under the bounce back loan scheme.