Latest Coronavirus Support Measures
Update – 5th November 2020
In the wake of the second lockdown, the Chancellor Rishi Sunak has today (5th November 2020) made the following announcements:
The Coronavirus Job Retention Scheme (CJRS) furlough scheme will now be extended until the end of March 2021.
Eligible employees will receive 80% of their usual salary for hours not worked, up to maximum of £2,500 per month. The £2,500 cap is proportional to the hours not worked.
The CJRS grant does not cover employers’ National Insurance contributions or pension contributions, meaning that Employers will remain liable for these costs.
An employer can claim for employees who were employed and on their PAYE payroll on 30 October 2020. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 20th March 2020 and 30th October 2020, notifying a payment of earnings for that employee.
The CJRS extension will be reviewed in January 2021 to examine whether the economic circumstances are improving enough for employers to be asked to increase contributions.
Job Retention Bonus
Due to the additional support being provided, the Government has announced that the Job Retention Bonus falls away, meaning that the Job Retention Bonus which was due to be paid in January 2021 will no longer be paid. Instead, the Government will redeploy a retention incentive at the appropriate time.
Extension to the Self Employed Income Support Scheme (SEISS)
The Chancellor has announced that the third grant for the self-employed will be increased to 80% (previously planned to be 40%), covering November 2020 to January 2021.
This will be calculated based on 80% of average monthly trading profits, paid out in a single instalment and will be capped at £7,500. Full details of how the average will be calculated will be announced in due course.
The window for claiming the third grant will open from 30th November 2020 on a phased basis. HMRC expects to pay grants within six working days of the date of the claim.
Financial Support for local businesses in England
Businesses in England that are forced to close due to national or local restrictions will receive up to £3,000 per month.
Business grants will be awarded as follows:
- Small venues (rateable value up to £15k) – £1,334 per month
- Medium venues (rateable value between £15-51k) – £2,000 per month
- Large venues (rateable value over £51k) – £3,000 per month
The grants will be managed by local authorities. Further details will be announced shortly.
Backdated cash grants for businesses in Tier 2/3 areas in England. Businesses in the hospitality, leisure and accommodation sectors that suffered from reduced demand due to local restrictions introduced between 1st August and 5th November will receive backdated grants at 70% of the value of closed grants up to a maximum of £2,100 per month for this period. Further details can be found here.
Coronavirus Loan extensions
The Government plan to extend the application deadline for loan schemes – that is, the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, Future Fund, and Coronavirus Large Business Interruption Loan Scheme – to the end of January 2021.
This will give businesses two extra months to make loan applications (relative to the current deadline of 30th November).
They have also amended Bounce Back Loan Scheme rules to allow those businesses who have borrowed less than their maximum (i.e. the lower of £50,000 or less than 25% of their turnover) to top-up their existing loan. Businesses will be able to take-up this option from next week; they can make use of this option once.
Mortgage and consumer credit payment holiday extension
Mortgage payment holidays will continue to be available for homeowners in the UK. Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a 6 month holiday and those that have already started a mortgage payment holiday will be able to top up to 6 months without this being recorded on their credit file. The FCA published draft guidance setting this out on 2nd November.
Payment holidays will also continue to be available for consumer credit products such as personal loans and car finance. As with mortgages, borrowers impacted by coronavirus who have not yet taken a payment holiday on that product can ask for one of up to 6 months and those that currently have a payment holiday will be eligible to top up to six months without this being recorded on their credit file. Borrowers with high-cost short-term credit products such as payday loans will continue to be entitled to a maximum month payment holiday. The FCA published draft guidance on this on 4th November.
Recap of existing economic support for people and businesses
- Reduced VAT for hospitality, accommodation and attractions until the end of March 2021
- Business rates relief for hospitality, retail, leisure and nurseries until the end of March 2021 in England
- £500 payments for those on low incomes in England who are asked to self-isolate for 14 days, and £500 million Hardship Fund for local authorities to use to help the most vulnerable. Please click here for further details.
- Extensive tax deferrals for general tax, VAT and Income Tax Self-Assessment