Key points on the recent announcement of financial support available as we enter another lockdown
Job Retention Scheme Extended
The Job Retention Scheme (JRS) was due to come to an end on 31st October 2020 and replaced by the Job Support Scheme (JSS), but following the announcement of the second national lockdown, the JRS will now end on 30th November 2020.
The new national lockdown will currently be running from 5th November to 2nd December 2020 but the extension of the furlough scheme will run on the calendar month from 1st November to the 30th.
The amount of the grant under the extension will be increased back up to 80% of the employee’s current wages for time not worked, up to £2,500 per month. The employer will be responsible for employer national insurance and pension contributions.
All employees will qualify for the scheme provided they were reported on an RTI return on or before 30th October 2020 (therefore on the payroll at this date). The employee does not have to have been included in an earlier claim under JRS.
Each furlough claim must be for a period of at least seven consecutive days. The scheme will operate on the flexi furlough scheme, so businesses that do not have to close can operate on reduced hours or bring staff in to set up for the re-opening of the business.
Employees on any type of contract can qualify but the guidance is yet to confirm if contractors and directors will qualify, this should be clarified shortly as more guidance is issued.
We are also awaiting guidance on whether the grant claimed under the extended scheme can be claimed prior to staff being paid for November.
Extended Self-Employed Income Support Scheme
It was announced on 2nd November 2020 that the first grant under the extended Self-Employed Income Support Scheme (SEISS) will be open from 30th November 2020.
The first grant under the extension of the scheme will cover the period from 1st November 2020 until 31st January 2021. It will be a taxable grant to cover 55% of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £5,160 in total.
The grant of 55% is an increase to the 40% that was previously announced in order to provide more support to eligible self-employed individuals through the second lockdown. The increase in the overall grant is to reflect an 80% grant for November with December 2020 and January 2021 reducing to a grant rate of 40%.
There is an additional second grant under the extension of the scheme to cover the period 1st February to 30th April 2021. HMRC have stated that they will be reviewing the amounts and eligibility for this second grant and will issue further guidance in due course.
Under the new national lockdown businesses that will again be required to close by law will be eligible for a support grant from their local authority. The grants will be based on the rateable value of the business premises in England as follows:
|Rateable value of premises||Grant payable per two weeks|
|Up to £15,000||£667|
|£15,001 to £50,999||£1,000|
|£51,000 or more||£1,500|
To see when these grants will be available you should check your local authority website for further details.
Mortgage holidays have been extended and we are still waiting for full guidance to be issued but the basic information is as follows:
- Borrowers who have not had a payment holiday will be able to request one
- Borrowers who have already started a payment holiday will be able to extend it up to a maximum of six months
- Borrowers who have already had a six-month payment holiday will be offered tailored support
If you require this assistance you should check the lenders website for further information and updates. It is expected that the Financial Conduct Authority will update the guidance from 2nd November so further information should be available shortly.
Extension of Access to Finance Schemes
The Government is extending the deadline for new applications to four temporary loan schemes until
31st January 2021. The four loan schemes available are:
- Bounce Back Loan Scheme (BBLS)
- Coronavirus Business Interruption Loan Scheme (CBILS)
- Coronavirus Large Business Interruption Loan Scheme (CLBILS)
- Future Fund
If you already have a loan under the BBLS but did not take out the maximum amount available you can now top that up.
If you would like more information on access to finance schemes please let us know and a member of our Corporate Finance Team can talk you through the options available.
Please feel free to contact us if you have any questions or require assistance in any way.