With the furlough scheme coming to an end on 31 October and coronavirus seemingly unstoppable many businesses are quite rightly worried about the impact it’s going to have on their livelihoods.
Earlier this month, the Chancellor announced a number of new measures, as well as changes to existing schemes to help businesses cope during these difficult times.
We take a look at some of the most significant coronavirus business support measures in place.
New Job Support Scheme for businesses facing reduced demand
From 1 November, the government will be launching the Job Support Scheme to replace the furlough scheme. Its aim is to protect ‘viable’ jobs in businesses who are facing lower demand for their goods or services because of Covid-19. The government says this support will ensure employees earn a minimum of 77% of their normal wages.
How the Job Support Scheme works
- Businesses will pay employees for time worked, which must be at least a third of their normal hours
- The cost of hours not worked will be split between the employer, the employee (through wage reduction) and the government, whose contribution is capped at £697.92 a month.
- Employees need to have been on the payroll on, or before, 23 September 2020.
- Claims can be made online through gov.uk and will be paid in arrears.
The scheme will run until April 2021 and businesses don’t need to have used the furlough scheme in order to take part, although large businesses will need to have a financial assessment test.
Job Support Scheme for businesses forced to close
Unfortunately, local coronavirus restrictions have meant that many businesses have been forced to close, so help has been put into place to help protect jobs during this period.
If restrictions mean that employees are off work for a minimum of 7 consecutive days, the scheme will pay employees two thirds of their normal salary up to £2,100 a month. Businesses are only eligible for the grant while the restrictions are in place and they will also be asked to cover NICS and pension contributions.
This scheme will also be available for 6 months, but will be reviewed in January 2021.
Local Restrictions Support Grant for businesses forced to close
Another option for businesses forced to close because of coronavirus restrictions is the funding available through the Local Restrictions Support Grant (LRSG). This grant is available to businesses that:
- Pay business rates on a property
- Have been forced to close because of coronavirus restrictions on or after 9 September for at least 3 weeks
- Are unable to provide usual in-person service. Examples include cafés and restaurants, who can no longer allow food to be consumed on their premises.
The grant available is determined by the rateable value of the business premises and is paid for each 3 weeks the business is closed. If you don’t pay business rates it’s still worth talking to your local council, as they may decide that your business is still eligible for funding.
Bounce Back Loan
The Bounce Back Loan is designed to help businesses access finance quickly during the pandemic. The amount you can borrow is between £2,000 and £50,000, although the amount is capped at 25% of your total turnover.
Key features of the scheme are:
- There is no interest to pay for the first year.
- No repayments need to be made in the first 12 months.
- Loans can last for 10 years, although you can repay early without penalty.
- Once you have made six payments, you can take one payment holiday lasting six months.
- You can move to interest-only payments up to three times. Each period can last up to six months.
Currently, there are 11 lenders taking part in the scheme and you have until the end of November 2020 to apply.
The Bounce Back Loan might also be worth considering if you work for yourself via a limited company or are self-employed. There are no strict rules from the Treasury on how you spend the loan as long as it comes under the banner of ‘working capital’ or ‘investment’ which means you could use it to pay bills and wages. It could therefore be a potential valuable source of money for those of you who don’t qualify for any other coronavirus business support.
Extension to the Self-Employment Income Support Scheme
In August, we reported that the SEISS scheme had been extended until 19 October 2020. Well, the good news is the SEISS scheme has been extended again. There will be an additional grant from November 2020 – January 2021 which will pay out 20% of average monthly profits for three months, and another grant running from February 2021 – April 2021. Dates haven’t been confirmed yet for these additional grants, but are expected in the next couple of weeks. Keep an eye on this page for more information.
Need help with coronavirus business support?
Knowing what support is available to help your business can be tricky, so please get in touch if you have any questions about how best to keep your business going during this difficult time.