Business support for new lockdown announced

Business support for new lockdown announced

As the second lockdown comes into force tomorrow, business support is changing to help those affected.

Rishi Sunak has revealed how the government will be supporting businesses and self-employed workers during the November lockdown.

‘Furlough’ scheme

The furlough scheme has been extended until March 2021, though it is being reviewed in January. And the government will pay 80 per cent of employee wages up to £2,500 per month.

The Coronavirus Job Retention Scheme (CJRS) was due to end on 31 October. It was going to be replaced by the Job Support Scheme, but this has been postponed.

The 80 per cent contribution is higher than the levels paid in September and October. These covered 70 per cent and 60 per cent respectively. Employers are still be expected to cover pension and national insurance contributions.

Flexible furlough will continue. This is where employers can bring back employees part-time and furlough them for the time they do not work.

Originally, the CJRS scheme was due to be replaced with the Job Support Scheme. This has since been postponed.

Self-employment help doubled

The government will double the level of support for self-employed workers in November. As a result, the Self Employment Income Support Scheme (SEISS) is being increased from 40% of average profits to 80%.

Applicants can apply from the end of November to provide faster support during the second lockdown.

The third round of SEISS taxable grants covers income from November to January for the self-employed affected by the pandemic.

The maximum grant is increasing to £5,160, as a result of extra funds made available. Grants for December and January will also be 80% of average profits. You can apply for this grant whether or not you applied for the first two grants.

Sunak said: “The rapidly changing health picture has meant we have had to act in order to protect people’s lives. I know this is an incredibly worrying time for the self-employed.”

Extension to business loans

The government has extended applications for its coronavirus business support loan schemes.

Applications for the Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS) and Coronavirus Large Business Interruption Loan Scheme (CLBILS) will stay open until January 31. These were originally due to come to an end this month.

The schemes provide businesses of various sizes with loans to help them during the Covid-19 pandemic. 

Small businesses which have borrowed less than the maximum 25% of their turnover (up to £50,000) under the BBLS will be able to apply for a top-up to their current loan.

BBLS will be made with a 100% guarantee from government. This means there are no fees or interest incurred in the first 12 months. After this grace period, the annual interest rate is capped at 2.5% for the remaining term of repayment.

If you would like more information, please do not hesitate to contact us.