You will no doubt be aware that the Prime Minister announced a second lockdown taking effect from Thursday 5th November. Related to these, the support package available to businesses from 1st November has also been changed.
Firstly, the Coronavirus Job Retention Scheme, more commonly known as the Furlough Scheme, has been extended for one month. It was due to finish on 31st October, to be replaced by the Job Support Scheme – which presumably now will start on 1st December unless the lockdown is extended beyond its current planned end date of Wednesday 2nd December.
This will be welcomed by businesses in many sectors, especially the hospitality, leisure and retail sectors which are to be forced to shut, or offer limited takeaway/collection only services. There will also be grants available to those businesses forced to shut.
Also, the Self Employed Income Support Scheme is being extended as previously announced, albeit on less generous terms than the first two grants. It is unclear whether this scheme will be expanded in view of the lockdown announced at the weekend, since the measures as they stand were announced before Saturday.
Details of previous guidance on all areas of Coronavirus support available to business can be found on the news section of our website.
Furlough Scheme (Coronavirus Job Retention Scheme – “CJRS”)
It was confirmed that the Furlough Scheme, officially called the Coronavirus Job Retention Scheme, or CJRS, would be continuing for one month (which we presume will be exactly one calendar month). It was originally planned to finish on 31st October 2020. It is presumed that the Job Support scheme, which was to replace furlough from 1st November, will now take effect from 1st December if the lockdown ends as planned on 2nd December. Presumably this will then either run until the end of April as originally planned, or possibly be extended to run for six months from its delayed start date.
Full details have not yet been released, though it is understood that the scheme will largely mirror the scheme as it was in August, meaning:
- Employees paid 80% of normal wages up to the £2,500 cap
- Full recovery of the 80% for employers via HMRC
- Employer must pay the Employer’s NIC and Employer’s pension contributions
- Furlough will continue to operate flexibly, so you can have your employees in for the hours required, and furloughed for the remainder of the time.
To qualify, the employer must have a UK bank account and PAYE scheme. The furloughed employee must have been on an RTI submission made by 23:59 on 30th October 2020. The employee need not have been furloughed previously, and indeed the employer need not have utilised furlough at all previously. Employers will need to report and claim for a minimum period of 7 consecutive calendar days. It is expected that claims will be able to be made in advance although there will be an immediate delay as systems are updated so claims will not be able to be made immediately due to these practical barriers.
Remember that it is critical to have the furlough agreement and calculations available for six years in case of inspection by HMRC.
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.
As with the previous grants, these will be administered via your local authority. Again, it is likely the local authorities will not have their systems ready for applications immediately, but it would be sensible to monitor their websites if you are eligible. We are awaiting comprehensive guidance on which businesses will be mandated to close, but the current guidelines can be accessed here.
Central government is also providing local authorities with funds for discretionary support for businesses, so again, you may wish to apply directly with your local authority in due course if you are adversely impacted by this second lockdown, especially if you do not qualify for the above grant scheme.
Self Employed Income Support Scheme (SEISS) – (edited on 27th November for updates announced since the article was written)
A further extension to the Self Employed Income Support Scheme was previously announced. This has now been made slightly more generous following Saturday’s announcement. Current guidance is available here.
Eligible individuals are those who claimed under the original scheme and can declare that they are intending to continue to trade but are either temporarily unable to or are experiencing reduced demand due to coronavirus.
The extension will come in two parts; one for 1st November 2020 to 31st January 2021 and a second for the period from 1st February 2021 to 30th April 2021.
The first grant will be calculated as 80% of average profits for November to January (this is the recent enhancement), capped at £7,500 total and to be paid in a single instalment. Please note that to be eligible for this grant, you will have to make a statement that you will have a significant reduction in your trading profits due to reduced business activity, capacity or demand/inability to trade due to Coronavirus during the period in question. The level of the second grant is yet to be decided.
Applications will now open on 30th November (previously announced as 14th December) 2020. Previously the application date was staggered, and we anticipate this may be the same again.
Please make sure you are following us on our social media platforms (Twitter @OxfordAccounts, LinkedIn and Facebook) and checking the news section of our website //crmoxford.co.uk/news/ for updates as we have them, and in particular for our analysis of the rules for both schemes, which are expected to be released in the next couple of weeks.
© Copyright 2020 Chapman Robinson & Moore Ltd Accountants, Oxfordshire