Support for businesses during the second lockdown and beyond

With the second wave of coronavirus infections upon us, the whole of England entered a four-week lockdown from 5 November. In line with the new restrictions, the Government has extended several of their financial support measures for businesses.

Coronavirus Job Retention Scheme (CJRS)

The Job Retention Scheme has now been extended to the end of March 2021.

The CJRS will broadly follow the same rules as they stood in August, where employers can furlough (wholly or partly) their staff and pay at least 80% of their usual pay for hours they did not work in the pay period.

The employer can then reclaim 80% of an employee’s wages for unworked hours back from the government (up to a cap of £2,500), although the employer is required to pay employer pension and employer national insurance costs without reimbursement, in addition to an employee’s pay for worked hours.

However, the criteria for staff being furloughed has changed:

•  Employees are not required to have been on a CJRS claim previously. Similarly, employers who have never claimed before are also eligible.

•  The scheme is open to employees who were employed and were included on the employer’s payroll (and notified to HMRC via an RTI submission) on or before 30 October 2020. This means that you are now able to furlough employees who were previously not eligible for the furlough grant.

•  Employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working afterwards can be re-employed and claimed for. The employer must have made an RTI submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.

Self-Employed Income Support Scheme (SEISS)

The third SEISS grant will cover 80% of average monthly trading profits (up to £7,500) for the period from November 2020 to the end of January 2021. The window for claiming the grant will open on 30 November.

To qualify for SEISS the individual must have satisfied all the following:

•  Income tax return for 2018/19 must have been submitted.

•  Must be self-employed or a member of a partnership.

•  Must have traded in the 2019/20 tax year.

•  Must be intending to trade in the 2020/21 tax year.

•  Must be trading at the time the grant application is made, or would be trading if it weren’t for COVID-19.

•  Trading profits from self-employment must be at least 50% of total income.

•  Trading profits from self-employment must be less than £50,000 in the 2018/19 tax year OR less than £50,000 on average over the 3 tax years 2016/17 – 2018/19.

•  Must have lost trading profits due to COVID-19.

Business grants

The Local Restrictions Support Grant (LRSG), which was originally introduced for tier three lockdown areas, is now available for any business required to close due to national measures.

Eligibility

Businesses are eligible for the LRSG if they meet the following criteria:

•  Occupies property on which it pays business rates.

•  Has been required to close because of the formal publication of restrictions guidance that resulted in a first full day of closure on or after 9 September. This funding is not retrospective

•  Has been required to close for at least 3 weeks because of the lockdown.

•  Has been unable to provide its usual in-person customer service from its premises e.g. non-essential retail, cafes or restaurants that provide a takeaway only service.

The LRSG counts towards state aid.

Businesses required to close in England due to 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.

Grants are based on the rateable value of the property on the first full day of restrictions and will be extended to cover each additional 3-week period.

Exclusions

Certain businesses are not eligible to apply for the LRSG:

•  Businesses which do not depend on providing direct in-person services from their premises and can continue to operate during the lockdown.

•  Businesses that have chosen to close when they are not required.

•  Businesses that are still subject to previous closures such as nightclubs.

•  Businesses that have reached the state aid limit.

Local council funding

Businesses may be eligible for funding at the discretion of their local council if they are required to close but do not pay business rates or are not required to close but are severely impacted.

Business loans

The deadline for applications for the government loan schemes have been extended to 31 January 2021.

This includes:

•  Coronavirus Business Interruption Loan Scheme.

•  Coronavirus Large Business Interruption Loan Scheme.

•  Bounce Back Loan Scheme.

•  Future Fund.

With Bounce Back Loans, businesses will now be able to ‘top up’ their loans under the scheme had the full amount permitted not been initially borrowed – lesser of £50,000 and 25% of total turnover. This option can only be used once, and it should be available to businesses from the week commencing 9 November.

This information is correct as of 6th November 2020. Visit our Coronavirus Hub for the latest updates: www.carpenterbox.com/coronavirus