Second National Lockdown
Financial Support Available
Summary of all the recent announcements of financial support available to help businesses through the second lockdown through to March 2021
Job Retention Scheme Extended
The Job Retention Scheme (JRS) was due to come to an end on 31st October 2020 and be replaced by the Job Support Scheme (JSS), but following the announcement of the second national lockdown and to provide certainty over the winter the scheme has been extended until 31st March 2021.
The amount of the grant under the extension for the claim period 1st November to 31st January 2021 will be increased back up to 80% of the employee’s usual pay, up to £2,500 per month. The employer will be responsible for employer national’s insurance and pension contributions.
In January 2021 the Government will review the situation and if there are signs of economic improvements employers will be asked to contribute to the scheme similar to how they have been.
- Qualifying Employers
Employers who have not previously made a claim under the JRS can apply under the extension of the scheme regardless if the business is open or closed.
Organisations who are publicly funded are still expected not to use the scheme except in cases where private revenues have been disrupted.
HMRC will publish details of employers who make claims under the extended JRS scheme and this will start from December.
- Eligible Employees
Employees need to be employed and on the payroll on 30th October 2020 and the employer must have notified a payment to that employee between 20th March 2020 to 30th October 2020 via PAYE Real Time Information (RTI) submission.
The flexible furlough rules will apply, so the employer can use the scheme to cover the hours not worked by the employee. Employees can be on any type of employment contract to qualify.
For employees who were previously eligible for JRS the calculations will remain the same even if a claim for them up to 31st October 2020.
For new employers claiming and new employees hired between 20th March 2020 to 30th October 2020 the calculations use the same method but use the following months/periods to calculate the reference pay/usual hours:
- Fixed pay employees employed on and after 20th March 2020, use the latest pay period prior to 30th October 2020.
- Variable pay/hours employees employed on and after 20th March 2020 use the average within the 2020/21 tax year up to the start of the furlough period.
- Claim Period
Each furlough claim must be for a period of at least seven consecutive days and the employer will have to report actual hours worked and usual hours the employee would be expected to work. The claim period must start and end within the same calendar month.
An employer can make a claim in anticipation of an imminent payroll run, at the point they run the payroll, or after. There will be a short gap as the system is updated but claims under the extension of the scheme can be made from 8.00am on Wednesday 11th November 2020.
The closing date for claims under the previous guidance up to and including 31st October 2020 remains 30th November 2020.
The closing date for claims relating to November 2020 must be made by the 14th December 2020. Claims for each subsequent month should be submitted by day 14 of the following month.
Further details and guidance will be published by the 10th November 2020 but please ask us if you have any questions regarding the extended scheme.
Job Retention Bonus
Due to the extension of the Job Retention Scheme the Job Retention Bonus will no longer be paid in February 2021.
Extended Self-Employed Income Support Scheme
It was announced that the third grant under the extended Self-Employed Income Support Scheme (SEISS) will be open from 30th November 2020.
The third grant of the scheme will cover the period from 1st November 2020 until 31st January 2021. It will be a taxable grant to cover 80% of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £7,500 in total.
The grant of 80% is an increase to the 55% that was previously announced in order to provide more support to eligible self-employed individuals through the second lockdown.
There is an additional fourth 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 fourth grant and will issue further guidance in due course.
As noted above these grants are taxable and will also be subject to National Insurance contributions.
- Local Restriction Support Grant
From 5th November to 2nd December 2020 businesses that will again be required to close by law will be eligible for a Local Restriction Support Grant from their local authority. The grants will be based on the rateable value of the business premises as follows:
|Rateable value of premises||Grant payable per four weeks|
|Up to £15,000||£1,334|
|£15,001 to £50,999||£2,000|
|£51,000 or more||£3,000|
- Additional Restriction Grant
There is also an Additional Restriction Grant scheme that will allow local authorities to pay discretionary grants to the following:
- Closed businesses that do not have a rateable value
- Business that are severely impacted rather than closed
To see when these grants will be available you should check your local authority website for further details. Per Oxford City Council these grants look to be available per their website from 9th November 2020.
Mortgage holidays have been extended as follows:
- Borrowers who have not had a payment holiday will be able to request one until 31st January 2021
- 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.
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.
The above is a basic summary of schemes announced and should not be taken as specific advice. For the majority of the above, we are awaiting the government to issue further guidance. How the above will impact an individual/business will vary in every case therefore we recommend that you seek advice based on your circumstances.