COVID-19: Financial support extended as lockdown gets parliamentary approval
The Treasury has announced a number of additional economic support measures to help businesses and individuals. These include:
Read time: 2 mins
Extension of the ‘furlough scheme’
The government’s Coronavirus Job Retention Scheme (CJRS) – also known as the ‘furlough scheme’ – has been extended on something approaching its original terms, meaning that affected employees will receive 80% of their current salary for hours not worked, up to a maximum of £2,500 per month. Following a further announcement by the Chancellor on 17 December, the CJRS will now operate until the end of April 2021.Businesses will need to pay National Insurance and employer pension contributions for the hours that the employee does not work.
As under the most recent terms of the CJRS, businesses will have the option to bring furloughed employees back to work on a part time basis or furlough them full-time.
To be eligible to get paid under the extended CJRS, employees must have been on an employer’s PAYE payroll on 30 October 2020.
The Treasury will shortly announce more details about the extended scheme, including how to claim support through an updated claims service.
The Job Support Scheme, which was scheduled to replace the CJRS from 1 November, has been postponed until the furlough scheme ends.
Local Restrictions Support Grants
Businesses that are forced to close due to local or national restrictions will receive grants worth up to £3,000 per month under the Local Restrictions Support Grant. The amount received is based on the rateable value of the business’ premises and will be paid fortnightly as follows:- For properties with a rateable value of £15,000 or under, the grant will be £1,334 per month (or £667 per two weeks)
- For properties with a rateable value of between £15,000 and £51,000, the grants are set at £2,000 per month (£1,000 per two weeks)
- For properties with a rateable value of £51,000 or above, the grants will be £3,000 per month (£1,500 per two weeks).
Self-Employment Income Support Scheme revised
The UK-wide Self-Employment Income Support Scheme (SEISS) has also been revised. The next grant under the SEISS, which covers the period November 2020 to January 2021, has been increased to 80% of average trading profits for the period, up to a maximum of £7,500.Payments under the Scheme has also been brought forward, with the claims window being moved to 30 November – two weeks earlier than originally planned.
Extension to loan schemes
The deadlines for applying for the government-backed loan guarantee schemes – including the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and Coronavirus Large Business Interruption Loan Scheme – have been extended by two months to the end of January 2021. This was subsequently extended by another two months until the end of March 2021.In addition, the Bounce Back Loan Scheme has been tweaked to allow those businesses that have borrowed less than their maximum to top-up their existing loans.