UPDATED: UK business & financial support during COVID-19 restrictions
The UK government has updated its business and employee support packages due to COVID-19 restrictions, applicable to businesses across the UK.
Businesses that have seen a downturn in business, or have been forced to close, due to COVID-19 restrictions will be eligible for cash grants of up to £2,100 a month. Primarily designed to benefit the hospitality, accommodation and leisure sectors, grants will be distributed via local authorities and can be backdated to August 2020 in any area that has been placed until enhanced restrictions.
Job Retention Scheme (furlough) - updated 5th November
The Job Retention Scheme has been extended until the end of March 2021 and will operate as the previous scheme did, with businesses being paid upfront to cover wages costs.
The government will pay up to 80% of wages up to a cap of £2,500 and employers will pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work. The Government will review their level of contribution in January 2021, and will announce then whether employers will need to contribute a higher percentage.
Flexible furloughing will be allowed in addition to full-time furloughing.
To qualify, employees must have been on the PAYE payroll by 30th October; they do not need to have been on the furlough scheme prior to this date.
Self Employment grants - updated 5th November
The Self-Employment Income Support Scheme Grant Extension provides two grants, each available for three month periods covering November 2020 to January 2021 and February 2021 to April 2021. From the month of November, December and January, the grant will cover 80% of a business' trading profits, up to £7,500.
The level of grant for the months of February 2021 to April 2021 will be reviewed and set in due course.
To qualify for the Self-Employment Income Support Scheme Grant Extension, you should:
- have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
- declare that you intend to continue to trade and either:
- are currently actively trading but are impacted by reduced demand due to coronavirus
- were previously trading but are temporarily unable to do so due to coronavirus
The Self-Employment Income Support Scheme Grant Extension is not available to self-employed people who are company directors of limited companies, but is available to sole traders and freelancers.
Online claims for the next grant will open on 30th November.
Businesses required to close in England due to local or national restrictions will be eligible for the following:
- 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.
Business Loans and Tax
As detailed in the Winter Economy Plan on 24th September, the Bounce Back Loan Scheme now has ‘pay as you grow' payback terms, from six to ten years. Interest only repayments are offered, and repayments may be suspended for up to six months. In addition, Coronavirus Business Interruption Loans will have a 10-year government guarantee, with application deadlines extended until the end of December 2020.
Plus, businesses may defer payment of VAT over an 11-month period, rather than one large payment at the end of March 2021, whilst those who pay income tax via Self-Assessment will also be able to extend their payments over 12 months from January 2021.
For details on how to apply and benefit from these schemes, visit the UK government website.