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.

For the Employed

Job Retention Scheme (furlough) 

The Job Retention Scheme has been extended until the end of September 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. 

From July 2021, employers will be expected to make a 10% contribution towards employees' salary, whilst in August and September a 20% employer contribution will be required.

Flexible furloughing will be allowed in addition to full-time furloughing.

To qualify, employees must have been on the PAYE payroll by 30th October 2020; they do not need to have been on the furlough scheme prior to this date.

National Living Wage

From 1st April 2021, National Minimum Wage for 21-22 year olds will be £8.36 per hour, National Minimum Wage for 18-20 year olds will be £6.56 per hour, and for 16-17 year olds will be£4.62 per hour. The Apprentice Rate will rise to £4.30 per hour.

For the Self Employed

Self-Employment Income Support Scheme

The Self-Employment Income Support Scheme Grant scheme has been extended until the end of September 2021.

A fourth grant covering February to April 2021, and a fifth from May onwards, will be available. 

During the period of February to April, qualifying self employed will be able to claim up to 80% of three months of their average trading profits up to £7,500.

To qualify for the Self-Employment Income Support Scheme Grant Extension, you should: 

• have been previously eligible for the Self-Employment Income Support Scheme (although you do not have to have claimed the previous grants) or be newly self-employed and have returned a 2019/20 tax return before midnight on 2nd March 2021
• 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. 

For Businesses 

Bounce Back Loan Scheme

The Bounce Back Loan Scheme 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; applications are open until the end of March 2021.

In addition, Coronavirus Business Interruption Loans will have a 10-year government guarantee, with application deadlines extended until the end of March 2021.

Recovery Loan Scheme

The new Recovery Loan Scheme, to replace the Bounce Back Loan scheme when it ends in March 2021, enables businesses of any size able to borrow from £25,000 up to £10 million.

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. 

COVID-19 Business Grants

Businesses required to close in England due to local or national restrictions will be eligible for the following:

Restart Grants

Beauty and hair businesses in England affected by COVID-19 lockdown restrictions, may qualify to claim a £18,000 Restart Grant from April.

Restart Grants will be administered by local authorities, with grant amounts calculated on a business' rateable value. The scheme replaces Local Restrictions Support Grants.

For details on how to apply and benefit from these schemes, visit the UK government website.

Mobile And Home Based Close Contact Services Fund

A one-off £4,000 payment for businesses in Scotland that qualify and have been forced to close under COVID-19 trading restrictions, including those in the beauty, hair and complementary therapy sectors.

To qualify, you must operate your business primarily on a mobile basis or from home for more than 50% of the time. The fund does not cover businesses that operate exclusively from fixed premises used solely for business purposes, e.g., salons, spas or clinics. You must have been operating before 17th March 2020.

In addition, you must not have received financial support through any of the following schemes: Strategic Framework Business Fund, Coronavirus Job Retention Scheme, COVID-19 Restrictions Fund Closure and Hardship Fund, Hardship Fund for Creative Freelancers, or the Wedding Sector Support Fund. 

Applications are open to those who are ordinarily resident in Scotland, operating in Scotland with a Scottish trading address, trade as self-employed or as a limited company registered with Companies House or HMRC.

For details on how to apply and benefit from this scheme, visit the Scottish government website. The deadline for applications is 16th March 2021 at 5pm. 

Apprenticeships

To encourage the recruitment of Apprentices, the incentive payment for employers who hire apprentices of any age will rise from £1,500 to £3,000.