With the announcement of Lockdown number 2 there has been an extension / revamp of Government Financial Support for Business today (5th November).
Here are today’s announcements – HM Government Economic Support Fact sheet
There are three main constituents to business support
- Self Employment Income Support
- Business Disruption Grants
Coronavirus Job Retention Scheme (CJRS) – “Furlough Scheme”
This was due to end on 30 October 2020, with the Job Support Scheme (JSS) being introduced in its place.
CJRS will now continue until the end of March 2021. Details are:
- Flexible Furlough or Full Furlough
- Flexible Furlough – Employer funds all of hours actually worked, Government funds 80% of normal hours not worked
- Full Furlough – Government funds 80% of all hours
- Funding is 80% and capped at £2,500 /m per employee
- Employers can top up the 80% at their expense
- Amounts claimed must be passed on to employees
- On both schemes Employer pays Employees NI and pension contributions
Bear in mind, CJRS is an employer scheme to fund payroll costs and thus protect jobs. Its often talked about in terms of being employee / individual support which can cause confusion.
Government says there will be a review of the scheme in early 2021. Due to extension of CJRS the planned Job Retention Bonus of £1,000 in early 2021 is being revoked
Self Employment Income Support Scheme (SEISS)
In the Winter Economy Plan a third and fourth grant for the Self Employed was announced. The third grant was to be 20% of historic profits, the fourth grant amount to be confirmed.
On 22 October 2020 the third grant percentage was uplifted to 40%, and earlier this week to 55% (80% / 1 month, 40% / 2 months).
Today (5th November) the grant has been uplifted to 80% for three months.
- No change in existing eligibility meaning anyone starting Self Employment after April 2019 is excluded, and reference periods for average profits are 2016-17, 2017-18 and 2018-19. Compared to the earlier grants the only thing that changes is the percentage
- 80% third grant (described in some places as first extended grant), will cover November 2020 to January 2021, capped at £7,500
- Fourth grant to cover February 2021 to April 2021, details and amounts to be decided (nb the dates do not appear to be significant)
- Claims open for third grant 30 November 2020
- Grants are subject to Tax and NI via Self Assessment
Salient point is criteria do not change so those previously excluded remain so.
Business Grants for Premises Forced to Close (England only)
Where premises are required to close under Coronavirus restrictions, grants are available based on the Ratable Value of the premises, as follows:
- For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks
- For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks
- For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.
These grants are for England only, with separate arrangements for Devolved administrations.
They are administered by Local Authorities. Government says “We will make allocations to Local Authorities later this week, giving them the cover they need to start making distributions and funding will follow next week”
There is seemingly no sector restriction on these grants, other than they apply to businesses forced to close. In some places the grants are described as being for “Retail, Hospitality and Leisure” – this would seem to be as these are the main sectors affected, but other sectors forced to close should be able to benefit.
Additionally “Local Authorities in England will receive one off funding of £1.1 billion to support businesses more broadly over the coming months as a key part of local economies. They can use this at their discretion. This will be distributed to local authorities on the basis of c.£20/head of population. Some of this funding has already been provided to local areas that entered into Tier 3.” – it seems the aim is to allow Local Authorities to assist businesses not otherwise supported, although as in the spring this is likely to be targeted at businesses with high fixed premises costs not otherwise eligible for premises grants, rather than to those missing out on SEISS.
Other Points Around Support
The Job Retention Bonus scheme, due to pay out to eligible employers in early 2021 has been shelved / scrapped.
Territorially the CJRS and SEISS seem to be UK wide, whereas the Business Grants are England only
- Tax spreading available
- Loan application deadline for Bounce Back Loans and Coronavirus Business Interruption Loan Scheme extended to end of January 2021
Finally, looking back we have provided as a firm a lot of guidance on Coronavirus since March this year – a lot of this is superseded now, but its not always possible to flag this – please exercise discretion when visiting our website.