Following the announcement of a second lockdown in England, the Government has released further information on how they will support businesses and their employees.
Here's a quick summary of all you need to know:
Local Business Grants
Businesses whose premises have been forced to close during lockdown will be able to apply via their Local Authority for a business grant ranging from £934 to £3,000 per month.
Local Authorities will also receive one-off funding to support businesses and local economies over the coming months. This is due to be distributed to the Local Authorities on the basis of c.£20/head of population.
This is expected to benefit 600,000 businesses across England. Backdated grants will be available for leisure, tourism and accommodation businesses in tier 2/3, again via local councils.
The Coronavirus Job Retention Scheme (CJRS), aka furlough, has been extended to 2nd December 2020. Eligible employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. As the scheme was working in August, there will be no employer contributions for hours not worked. Employers will only be asked to cover National Insurance and employer pension contributions.
The extended CJRS is now open to employees on the October payroll, meaning that more employees are eligible. This also applies to employees who were made redundant after 23rd September, under the scheme you can re-employ and furlough them.
Extending the CJRS has delayed the launch of the less generous Job Support Scheme (JSS), which was due to begin on 1st November. The JSS scheme will be delayed until the withdrawal of the Coronavirus Job Retention Scheme, which it is anticipated to be extended further into December and possibly January.
The application deadline for loan guarantee schemes has been extended to the end of January 2021. This includes the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme and Coronavirus Large Business Interruption Scheme. This allows an extra two months to make loan applications.
The Bounce Back Loan Scheme rules have been adjusted, allowing those businesses who have borrowed less than their maximum (less than 25% of their turnover) to top-up their existing loan.
Self-Employed Income Support Scheme (SEISS)
The Self-Employed Income Support Scheme (SEISS) has been extended but is only available for those who were previously eligible for the first and second grants. The grant has been increased to cover 80% of average trading profits for November, then 40% for December and January. Increasing the level of support for self employed individuals to 55% of average trading profits (capped at £5,160 in total for those months). Grants are taxable income and subject to National Insurance contributions. The online service for this grant has been brought forward to Monday 30th November.
Kickstart Job Scheme
The Government’s £2 billion Kickstart Job Scheme is open, creating hundreds of thousands of fully subsided jobs for young people. Placements are open to young people aged 16-24 who are claiming Universal Credit and at risk of long-term unemployment.
Employers will receive 100% funding of the relevant minimum wage for 25 hours per week, plus associated National Insurance and employer pension contributions.
Kickstart Scheme applications must be for a minimum of 30 job placements. If a single employer cannot provide this many job placements, they can find a Kickstart gateway, such as a local authority, charity or trade body for help applying.
This is a great opportunity to think about the long-term benefits this could bring to your business. With the Coronavirus Job Retention Scheme in place to support those who may not be able to work, some businesses will be short of resource. The Kickstart scheme could provide you with an apprentice to cover resource, while being trained by those on flexible furlough.
Owner Managed Companies
As with the previous Winter Economy update, there is no support outlined for owner managed companies who pay themselves a basic wage and top-up with dividends. This comes as another blow to those who are excluded from Government support. Owners must think about how they can survive this, such as adapting costs and maximising revenues.
*Information credited to Portt & Co