With the second national lockdown upon us, the support offered to businesses has and will continue to adapt. As it stands, these are the latest announcements regarding support:
Some positive news to come out of the new announcements concerns the Coronavirus Job Retention scheme, which has been extended and increased in light of the new lockdown.
Prior to this announcement, the scheme was scheduled to end on 31st October. Now, it will be extended until the end of March 2021.
It is important to note, however, that the level of wage support offered to employers will be reviewed in January. So despite the definitive assurance of the schemes continuation, businesses may be asked to contribute more, depending on how the economy is recovering.
Under the extension, furloughed employees will (initially) receive 80% of salary for hours not worked, with businesses asked only to cover National Insurance and employer pension contributions.
Employers will still be able to furlough employees full time or part time and these furloughed employees will receive 80% of their current salary for hours not worked, up to a maximum of £2,500.
To be eligible for the grant, an employee must have been on an RTI submission made to HMRC before 23:59PM on 30 October 2020. This is separate to the CJRS, that ran from 1st July to 31st October, since that required an employee to have been furloughed before 30th June.
As part of the revised scheme, anyone made redundant after 23 September can be rehired and put back on furlough. Moreover, the Job Support Scheme (JSS), which had been due to commence on 1 November, will not start until the CJRS closes.
It has been announced that the Self-employment Income Support Scheme (SEISS) will be increased from 40% to 80% of average trading profits for November to January.
The Job Retention Bonus- the £1,000 one-off payment to firms that had retained previously-furloughed staff until the end of January 2021- will be scrapped for the present time.
There are plans for the bonus to be replaced with a new retention incentive , but details of the specific nature of this inceptive are yet to be outlined.
It has also been announced that more businesses will be able to access additional support as deadlines for applications for government-backed loan schemes and the Future Fund have been further extended until 31 January 2021. According to the government, businesses can also ‘top up’ existing Bounce Back loans if they need to.
However, since some of the original accredited lenders stopped offering Bounce Back Loans in October, it is unknown which will ‘reopen’ for loan applications between now and the end of January. You can see details of the various accredited lenders here.
Homeowners struggling financially because of coronavirus will be able to pause their mortgage payments after the mortgage holiday deadline has been extended.
The scheme was due to end on Saturday, October 31, but now the availability of payment deferrals has been extended by another six months.
Full details are not currently available - and borrowers should await information from their lender rather than contact them - but what we know is:
Borrowers who've not yet had a payment holiday will be able to request one. This could last up to six months
Borrowers who've already started a payment holiday will be able to extend it. This would be up to a maximum of six months (but borrowers who've already had a six-month payment holiday and still need help will be offered 'tailored support', which they will discuss with their lender).
These mortgage holidays won’t show up on your credit report.
The information regarding these grants, which will be administered by local authorities, is complex. As it stands, many local authority websites have not yet been updated with current information.
There are 4 separate divisions of Local Authority Restrictions Grant (LRSG):
Local Restrictions Support Grants (LRSG) (Closed) – Business required to close under level three restrictions and the current National Lockdown
LSRG (Open) - Businesses which were open before lockdown but severely impacted by Local Covid Alert Level ‘High’ and ‘Very High’ restrictions.
LRSG (Sector) - Businesses which have not been allowed to open since the 23 March 2020 lockdown
Additional Restrictions Grant (ARG)
We at Gow & Partners advice that you keep checking your local authority's website for updates and contact us on 01254 589799 if you have any questions regarding the content of this blog.