New announcement of Government financial support – UPDATED
Wednesday 13 January, 2021
Coronavirus Update – On 17th December the UK Government announced more financial support for business, employees and self-employed. In this article we review the measures put in place since March 2020.
Government introduce additional one-off grants for businesses – 05/01/21
Following the lockdown announcement, Rishi Sunak announced one-off top up grants for retail, hospitality and leisure businesses as well as a discretionary fund made available to Local Authorities to support other impacted businesses on 5th January. For further information any businesses should apply to their Local Authorities.
The one-off grants are provided on a per-property basis to support businesses through the latest restrictions, as follows:
- £4,000 for businesses with a rateable value of £15,000 or under
- £6,000 for businesses with a rateable value between £15,000 and £51,000
- £9,000 for businesses with a rateable value of over £51,000
This new support is in addition to the extended Coronavirus Job Retention Scheme, the extended deadline for the four business loan schemes and the fourth SEISS grant covering February 2021 to April 2021.
Support for business and individuals – March 2020
In the Budget 2020 on Wednesday 11 March, the Chancellor announced significant support for businesses and individuals to financially survive the coronavirus pandemic. This evolved throughout the summer with more support and schemes extended.
Support for business and individuals – Winter Economy Plan 2020
On 24 September 2020, Rishi Sunak announced the Government’s Winter Economy Plan designed to continue to help businesses and individuals in light of the re-introduced social restrictions and the rising coronavirus cases.
Throughout October 2020, the Government announce further support for areas that were in the highest risk tier of the three-tier system to fight the latest increase in coronavirus cases and deaths.
With much of the UK going into another National Lockdown in November 2020, the Chancellor announced additional economic support for business, employees and self-employed to cover the winter months.
Support for business and individuals – December 2020
On 17 December 2020, Rishi Sunak announced an extension to many of the current schemes and confirmed the date for the next Budget and said this would set out the next phase of the economic plan to tackle the virus.
The key points of the latest announcement are:
- Extend the Coronavirus Job Retention Scheme further, until the end of April 2021.
- Extend the deadline for new applications for the following four business loan schemes to 31 March 2021:
- Coronavirus Bounce Back Loan Scheme
- Coronavirus Business Interruption Loan Scheme
- Coronavirus Large Business Interruption Loan Scheme
- Future Fund
- Confirmation that there will be a fourth SEISS grant covering February 2021 to April 2021. The actual details to be confirmed later.
- The Budget will be taking place on 3 March 2021. It was confirmed that this will set out the next phase of the plan to tackle the virus and protect jobs and will be published alongside the latest forecasts from the Office for Budget Responsibility (OBR).
Extended Coronavirus Job Retention Scheme
- It was previously announced that the Coronavirus Job Retention Scheme was being extended until 2 December 2020 and then to the end of March 2021.
- It has now been confirmed that the Scheme will be extended to the end of April 2021 for all parts of the United Kingdom.
- Eligible employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month.
- Businesses will have flexibility to use the scheme for employees for any amount of time and shift pattern, including furloughing them full-time.
- There will be no employer contribution to wages for hours not worked.
- Employers will only be asked to cover National Insurance and Employer pension contributions for hours not worked.
- The extended Coronavirus Job Retention Scheme will operate as the previous Scheme did, with businesses being able to claim either shortly before, during or after running payroll.
- Claims made for November 2020 have already been submitted. For claims relating to subsequent months, these should be submitted by day 14 of the following month.
- Neither the employer nor the employee needs to have previously claimed or have been claimed for under the Scheme to make a claim under the extended Coronavirus Job Retention Scheme (if other eligibility criteria are met).
- An employer can claim for employees who were employed and on their PAYE payroll on 30 October 2020. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
- Employees that were employed and on the payroll on 23 September 2020 (the day before the Job Support Scheme announcement) 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.
Job Support Scheme
- The previously announced Job Support Scheme which was intended to replace the Coronavirus Job Retention Scheme has been suspended.
Job Retention Bonus
- The Job Retention Bonus, previously announced, will not be paid in February 2021.
- The purpose of the Job Retention Bonus was to encourage employers to keep people in work until the end of January 2021. However, the extended Coronavirus Job Retention Scheme effectively does this.
Vishal Gulrajani, Financial Adviser in Goff’s Oak & Cheshunt, Hertfordshire said:
‘It is great news that the Government has extended its support for businesses and individuals. For anyone on furlough it is really helpful that the scheme is being extended to April 2021. With London, Essex, Hertfordshire and Bedfordshire recently being put into the new Tier 4 many hospitality businesses and shops are forced to close again, so they can’t trade during their busiest time of year. Please note that this is only general information. If you want to check if your business qualifies for some of the financial support, please contact your local authority. Alternatively, please call your Thomas Oliver mortgage advisor or financial adviser for more information on 01707 872000. Remember we offer a free initial financial advice consultation. We hope that you and your families stay safe this Christmas and we wish you a healthy and Happy New Year.’