As announced just before Christmas the coronavirus job retention scheme (“CJRS”) has now been extended to 30 April 2021 and the Government will pay 80 percent of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month until 30 April 2021.

As some childcare providers are now closed or only open to children of key workers and vulnerable children, HMRC has issued a reminder that employees can be furloughed because they have caring responsibilities resulting from COVID-19.

Can employers use CJRS grants to pay for holiday leave?

If employers have furloughed employees because of the effect of coronavirus on their business, they can claim under the CJRS for periods of paid leave their employees take while on furlough, including for bank holidays such as Christmas Day or Boxing Day.

If their employee is flexibly furloughed, they can count any time taken as a holiday as furloughed hours rather than working hours. This means they can claim 80 percent of their usual wages for these hours. Employers should not place employees on furlough just because they are going to be on paid leave.

If a furloughed employee takes a holiday, employers should top up their pay to their normal rate in line with the Working Time Regulations. More information is available on GOV.UK.

Can employers include a Christmas bonus in their calculation for the grant?

Employers can claim for regular payments that they are contractually obliged to pay their employees, including compulsory commission, fees and overtime. However, they cannot claim for discretionary commission, non-contractual bonuses (including tips) and non-cash payments. More information is available on GOV.UK.

The self-employed income support scheme

The third self-employed income support scheme (“SEISS”) grant was open for claims until midnight on Friday 29 January 2021.

Eligibility for the third SEISS grant was limited to people whose business has faced reduced demand or has been temporarily unable to trade due to COVID-19 since 1 November 2020, for example, due to Government restrictions.

In addition, taxpayers were also required to confirm that they reasonably believe that any reduced demand or inability to trade from 1 November 2020–29 January 2021 will result in a significant reduction in their trading profits, compared to what they would otherwise expect to have achieved (no comparison needs to be made to previous periods or years).

Taxpayers do not have to consider any other coronavirus scheme support payments they have already received when deciding whether they reasonably believe that they will suffer a significant reduction in trading profits. This reduction needs to be due to reduced activity, capacity, demand or inability to trade due to COVID-19 during 1 November 2020 to 29 January 2021.

Lost credentials

During the SEISS online claim process, there are prompts for recovering lost UTR, NINO and Government Gateway credentials. Taxpayers should be able to get these details online without having to call HMRC.

Self-Assessment returns

As with the first and second SEISS grants, the third SEISS grant will be subject to income tax and self-employed National Insurance. However, no SEISS grants should be included in 2019/20 self-assessment tax returns due to be filed by 31 January 2021. Alongside the first and second grants, the third grant should be reported on 2020/21 self-assessment tax returns due to be filed online by 31 January 2022).

Details of the fourth grant are not now expected until Budget 2021 on Wednesday 3 March.