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Second national lockdown: round-up of business support

Second national lockdown: round-up of business support
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Second national lockdown: round-up of business support
Siobhan Stirling - Sharp Minds Communications for Capital Space by Siobhan Stirling - Sharp Minds Communications for Capital Space
Owner/Director - Sharp Minds Communications Ltd

“They think it’s all over - ….” But, apparently, it’s not! As a business owner, you were no doubt aware that the government-funded furlough scheme was due to end with Halloween, and you were probably getting to grips with the replacement Job Support Scheme. But to soften the impact of a new national lockdown starting on 5 November, the government has also announced it’s extending its Coronavirus Job Retention Scheme. Other support measures have also been put in place to help businesses – and households – through the financial implications of this second lockdown. Here’s our round-up of the help available to you.

Coronavirus Job Retention Scheme – extended

The government-backed furlough scheme was being wound up, with companies having to foot increasing proportions of the wage bill for furloughed staff, but it’s now been given the kiss of life until December. Employees will receive 80% of their current salary for hours not worked, up to a maximum of £2,500 a month, reflecting the support available in August. 

Initial government guidance is that the scheme applies to businesses of all sizes, including charities and not-for-profit.  Employers will have flexibility about bringing back staff on a part-time basis or furloughing them full time, and will only be asked to cover National Insurance and employer pension contributions (typically just 5% of employment costs). You do not have to have accessed the furlough scheme before to be eligible.

As is always the case, the devil is in the detail, and there has been little detail released alongside the headline announcement.  Our earlier article on the original furlough scheme has more about how it applied in practise, but check the government’s website for latest guidance and talk to an HR expert to understand the nuances of the extension and what they might mean for you and your staff.

Self-Employment Income Support Scheme Grant – extended

The scheme has effectively been extended until April 2021 in the form of two grants, each available for a three month period – November 2020 to January 2021 and then February 2021 until April 2021 – with the grants being paid in two lump sums covering each period.

To be eligible, you must be self employed and:

  • Have been eligible for the first and second grant of the SEISS, even if you didn’t claim it
  • Declare that you intend to continue to trade and either:
    • Are currently trading, but have reduced demand due to Covid-19
    • Are temporarily unable to trade due to Covid019

The level of support will taper, to match the planned replacement of the extended Coronavirus Job Retention Scheme with the less generous Job Support Scheme in December and January:

  • 1 November 2020 – 31 January 2021: a grant of 55% of average monthly trading profits, paid out as a single grant to cover three months of profits, capped at £5,160 in total.
  • 1 February 2021 – 30 April 2021: the level of the grant is still to be decided, but expect it to be lower.

The grants are taxable and are also subject to National Insurance contributions.

The online service for the next grant is due to be available from 30 November 2020, when details on how to apply will also be provided by HMRC, so make a note in your diary to check  gov.uk then. 

Business support grants  

If the new restrictions mean you have to close your business premise – for example if you are in the hospitality, leisure or non-essential retail sectors – you may be able to apply for a Local Restrictions Support Grant, worth up to £3,000, depending upon the rateable value of your workplace:

  • Rateable value up to £15,000: grants = £1,334 per month or £667 per two weeks
  • Rateable value £15,000-£51,000: grants = £2,000 per month or £1,000 per two weeks
  • Rateable value more than £51,000: grants = £3,000 per month or £1,500 per two weeks

Additionally, £1.1bn is being given to local authorities to enable them to support businesses more broadly. When similar announcements have been made previously, there has been a lag between the headline and local councils getting necessary guidance on how they might allocate such funds – and an even longer delay before they actually receive the money. Quite what this will mean in practise, or when the grants might be available, is therefore a guessing game. Your best bet is to monitor your local council website; previously many councils have enabled companies to register their interest in particular support packages pending further details. Other support schemes have been run on a first-come-first-served basis, so it’s advisable to put your name forward as soon as possible.

Mortgage holidays extended

Mortgage holidays had also been due to finish at the end of October, but these have also been extended:

  • If you have not previously applied for a mortgage holiday, you are entitled to a six-month holiday
  • If you have already started a mortgage payment holiday, you will be able to top this up to six months

The advice from the Financial Conduct Authority is that mortgage holidays authorised under the government’s coronavirus support measures do not affect your credit score. However there have been reports that they may affect your ability to borrow, so you may want to research whether this is the right option for you before rushing to take advantage of this opportunity.

It’s the second national lockdown that nobody wanted, but many businesses have now developed agile responses to support alternative ways of working and nurtured new income streams to replace lost revenue. Taking advantage of the support available to you and robust financial forecasting will put you in a better position to steer your business successfully through this new lockdown.

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