Lockdown 2.0 and New National Measures for England

New national lockdown for England and changes to business support measures

Even though the devolved Nations have been performing varying degrees of lockdown over the last few months, including a “firebreak” lockdown in Wales which ends on the 9th November, the announcement of a National lockdown in England has a knock-on effect for businesses across the rest of the UK and inevitably, the support measures available to them as Westminster look for ways to support businesses in England.

The four week lockdown for England is set to come into effect from midnight on Thursday 5 November and will apply until Wednesday 2 December 2020. This lockdown will close pubs, restaurants, entertainment venues, hotels and non-essential shops and people will be advised to work from home if possible.

Unlike the first spring lockdown, schools, colleges and universities will remain open.

Below are the most up-to-date support measures available to businesses following the announcement of these new restrictions.

Coronavirus Job Retention Scheme (CJRS)

The Coronavirus Job Retention Scheme (CJRS), also known as the furlough scheme will be extended until December with employees receiving up to 80% of their salary for hours not worked. The exact date that the extended scheme will finish has not yet been confirmed.

The support via the furlough scheme had been steadily reduced over the last few months in line with businesses being able to trade with a limited degree of normality. Support had reduced to 70% of wages in September and 60% in October before the scheme was due to come to an end on 31 October 2020. Businesses were primed and ready for the CJRS to be replaced by the Job Support Scheme (JSS), a scheme that would have topped up wages for people returning to work on reduced hours. However, a new National lockdown means that the introduction of the JSS has now been put on hold until the CJRS extension ends, causing no end of headaches for those who are trying to run their payrolls during this time, but relief for many businesses and employees who are able to continue to receive support via the scheme.

The changes can be summarised as follows:

• People who are unable to work will receive up to 80% of their wages during the new lockdown. This payment is subject to a maximum of £2,500 per employee (for hours not worked). Employers will have the discretion to top-up the payments if they so wish.
• The scheme is expected to apply across the UK, in England, Wales, Scotland and Northern Ireland even where the regions are subject to different lockdown restrictions.
• Employers will be required to pay employer NICs and pension contributions for their employees whilst on furlough.
• Flexible furloughing, whereby employers can bring back employees to work part-time will be allowed. Employers will have to pay employees for the hours they work but can still use the scheme to cover any normal hours where employees are furloughed.
• Businesses will be paid upfront by the Treasury to cover wages costs. However, there will be a short period whilst the Government changes the legal terms of the scheme and updates the system. During this time businesses will be paid in arrears.
• To be eligible, employees must have been registered on their employers PAYE payroll by 23:59 on 30 October 2020. This means a Real Time Information (RTI) submission notifying payment in respect of that employee must have been made to HMRC on or before 30 October 2020.
• All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.
• Further details on how to make a claim are expected to be released shortly. There will be no gap in eligibility between the previously announced end date of the scheme on 31 October 2020 and this new extension.

Mortgage holidays

It has also been confirmed that mortgage payment holidays will no longer end as planned on 31 October 2020. Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.

Cash grants

It had been previously announced that businesses in England that are forced to shut as a result of a lockdown will be eligible for grants of up to £3,000 per month payable every two weeks. Businesses will be eligible to claim after two weeks of closure.

The amount businesses will be able to claim from their local authority depends on their rateable value:

• Small businesses with a rateable value of or below £15,000 will be able to claim £1,334 per month or £667 per two weeks.
• Medium-sized businesses with a rateable value between £15,000 and £51,000 will be able to claim £2,000 per month, or £1,000 per two weeks.
• Larger businesses will be able to claim £3,000 per month, or £1,500 per two weeks.

Further support for businesses

The government is providing an additional £1.1bn to Local Authorities in England, distributed on the basis of £20 per head. These payments are designed to help Local Authorities to support businesses more broadly.

Self Employed Income Support Scheme Extension (SEISS)

The Government has confirmed that there will be additional help for the self-employed during the next national lockdown in England.

It had previously been confirmed that the grants for the self-employed would be based on 40% of previous qualifying earnings for the months of November, December and January. It has now been announced that the self-employed will receive 80% of average trading profits for November along with the previously announced 40% of trading profits for December and January. This will increase the grant for the three months to a maximum of £5,160 (from £3,750) made available to those who meet the eligibility requirements.

It has also been confirmed that the claims window for the grant is being brought forward from 14 December to 30 November to allow payments to be made more quickly.

An additional second grant will be made available from 1 February 2021 to 30 April 2021. The level of this second grant amount is subject to review and will be set in due course.

Government-backed loan schemes

The deadline for applications for government-backed loan schemes and the Future Fund have been extended until 31 January 2021. It will also be possible for businesses to ‘top up’ existing Bounce Back Loans should they need additional finance.

Do you need our help?

During these worrying times for small businesses we have been working tirelessly to support and advise our clients, both old and new. If you are overwhelmed with it all and need the support of our Accountants, please get in touch.