November Covid-19 Relief Update: Impact for Business and Self-Employed
In England, ‘lockdown 2’ is currently upon us. A raft of relief extensions has accompanied the temporary shelving of the tiered lockdown approach. These include an extension of the furlough scheme until the end of March, as well as the extension of various Covid-related grants and loan schemes.
For business owners and self-employed contractors, here’s an up-to-date rundown of the measures in place, and how you can access the help that’s out there.
Lockdown 2 rules: a summary
The new rules came into force on 5 November. Pending any further U-turns, these measures will be removed on Wednesday 2 December. So far as business is concerned, the main restrictions are as follows:
Non-essential shops, entertainment and leisure venues (including gyms) are closed. Non-essential retail venues can still operate delivery and click-and-collect services (where goods are collected off the premises).
Pubs and restaurants are closed, but takeaways from these establishments are permitted.
According to the guidance, “everyone who can work effectively from home must do so”.
Hotels are still permitted to be open for guests who require it for work travel and a number of other limited reasons.
What support is available if I am forced to close?
Any business premises legally required to close as a result of either local or national restrictions will be eligible for payments under the Local and National Restrictions Support Grants scheme. Payments are based on the property’s rateable value as follows:
For properties with a rateable value below £15k, £1,334 per month
For properties with a rateable value of £15k-£51k, £2,000 per month
For properties with a rateable value of over £51k, £3,000 per month
Will my business be able to operate as normal after 2 December?
So far at least, the government has been bullish on this, with the prime minister stressing that 2 December is a hard deadline.
So will it be business as usual after that date? It’s unlikely. The end of the general lockdown will almost certainly mean a return to the local tiered system. For those areas where case rates and hospital admissions remain stubbornly high, there’s also talk of a new Tier 4 category: essentially a general lockdown by another name.
Tip: for an indication as to what kind of restrictions your business will still be operating under as December approaches, data on local trends is likely to be far more useful than national headlines.
Furlough scheme extension
The Coronavirus Job Retention Scheme (furlough) was due to come to an end on 31 October. It will now remain in place until 31 March.
Employees who are furloughed get 80% of their usual pay under the scheme, up to a maximum of £2,500 a month. Employers remain responsible for National Insurance and pension contributions.
So far, my business hasn’t furloughed anyone. Can I start using the scheme now?
Yes. So long as employees were on your company payroll on October 30, you can place them on the scheme. The scheme applies for full-time, part-time, flexible, zero-hours and agency workers, whether or not your business remains open.
Can I re-employ staff I let go and place them on the scheme?
Employees who were on the payroll as at 23 September 2020 but who were made redundant or left for other reasons, can be re-employed, furloughed and will qualify for a claim.
Can I use the scheme for partially-furloughed employees?
Yes. With the original scheme, there was an all or nothing approach: staff had to stop work completely to qualify. Under the new arrangements, flexible furlough is an option, with the government paying 80% of wages for the hours the employee does not work.
Is the Job Retention Bonus still available?
No. This was meant to be a one-off payment to businesses of £1,000 for each employee they keep on payroll until the end of January 2021. It was due to be paid in February 2021. The scheme has been shelved in light of the furlough extension, although we may see its return at a later stage.
How do I apply?
Updated guidance and application details for the Coronavirus Job Retention Scheme is available here.
Delivered through a panel of authorised lenders, the Coronavirus Business Interruption Loan Scheme (CBILS) enables small and medium-sized businesses access loans up to £5 million. These loans are 80% guaranteed by the government.
Bounce Back Loans (BBL) are 100% government-guaranteed and are meant to be a quicker and easier way of borrowing amounts between £2,000 and £50,000.
The application deadlines for both schemes have been extended to 31 January 2021. You can find out more about both schemes in our guide.
Lockdown 2 and support for the self-employed
Financial assistance is available through the Self-Employment Income Support Scheme (SEISS).
To be eligible for this additional support, claimants must have been eligible for the first two phases of (SEISS), although no claim has to have been made previously. To have been eligible for those first two phases all of the following must apply:
You submitted a Self Assessment tax return for the 2018/19 tax year, which included self-employment profits, by 23 April
You were self-employed in the 2019/20 tax year and traded for at least part of the year
Your trade has been adversely affected by coronavirus
Your self-employment profits for 2018/19 were £50,000 or less, but more than nil and your self-employment profits were equal to, or more than, your non-trading income
SEISS takes the form of a series of grants. The next scheduled grant phase covers the period from 1 November 2020 to 31 January 2021. Prior to lockdown, the value of the next scheduled grant was due to be set at 40% of average trading profits.
Support for the first month has now been increased to 80% of average trading profits, reducing to 40% for the further two months. This gives an average for the entire three month period, rounded up to 55% and capped at £5,160.
SEISS application details are available here.
Need further help?
For an expert overview of your possible financing options, business restructuring, cash flow assessments, payroll services and help with loan applications, North London Accountants, MJH Accountancy is here to help. To see what’s possible, speak to us today.