With COVID-19 cases on the rise, concerns have been steadily mounting about what the winter might bring for businesses across the UK. Under the Government’s new three-tier system, 13 regions in England are currently on ‘High’ alert, while the Liverpool City Region is under the most severe alert level of ‘Very High’.
While specific rules vary across each area, it means many businesses are currently unable to trade – and as the situation changes over the coming months, many more could face the same restrictions. Last Friday, the Chancellor announced a set of new measures aimed at businesses affected by regional restrictions and lockdowns.
THE EXPANDED JOB SUPPORT SCHEME
The coronavirus job retention scheme is closing at the end of this month, and will be replaced by the more flexible, but less generous, job support scheme. The job support scheme will see the Government and employers both contributing towards employees’ pay for the hours they’re not working. This is designed to help businesses that are still viable and able to open, but face reduced demand due to the pandemic.
For businesses that are legally required to close, however, an extension to the job support scheme has been announced, in which the Government will cover 67% of eligible employees’ pay up to a maximum of £2,100 a month. Under this extension, employers will only be required to cover employer national insurance and workplace pension contributions.
The Government estimates that around half of claims through the scheme are unlikely to incur employer NICs or auto-enrolment pension contributions, meaning there would be no cost to the employer.
To qualify, workers must be employed and an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 23 September 2020. Employees must be off work for at least seven consecutive days at a time, and the business must be required to close under Government restrictions – it doesn’t count if the business owner has chosen to close the business.
The scheme also covers food and drink businesses that are restricted to delivery, takeaway, or outdoor service under Government rules. Alongside the rest of the job support scheme, this will be available for six months starting on 1 November 2020, and is set to be reviewed in January.
Payments will be made in arrears through a HMRC claims service that is set to open in early December.
INCREASED CASH GRANTS
Cash grants for businesses under local restrictions are also being increased in England, while other areas of the UK have been given more funding to put similar measures in place.
Previously, the scheme allowed businesses to claim up to £1,500 every three weeks, but the extension means it will now offer up to £3,000 a month, and can be claimed after two weeks of closure. The amount available is based on the business property’s rateable value, with grants increasing as follows:
Small businesses with a rateable value of or below £15,000 can claim £1,300 per month.
Medium businesses with a rateable value between £15,000 and £51,000 can claim £2,000 per month.
Businesses can apply for these grants through their local council’s website. If you’re self-employed and haven’t made a claim for the second round of self-employment income support scheme (SEISS) grants
now is the time to do so.
From November, further SEISS grants will become available at a much lower level to the first rounds of the scheme. Meanwhile, 30 November 2020 is the last day you’ll be able to submit claims for furloughed employees’ pay under the coronavirus job retention scheme. This covers periods on or before 31 October 2020.
Those who keep furloughed workers on and in continuous employment until 31 January 2021 will be able to claim a £1,000 job retention bonus for each employee from 15 February 2021.
Employers also have the option to get funding for work placements under the kickstart scheme, or apply for a loan through one of the Government-backed schemes.
As always, if you need further advice and support, please do not hesitate to contact us on Nantwich Accountants T: 01270 623731 or Wilmslow Accountants T: 01625 416380.