03 Nov Second lockdown: What financial help is available?
On Saturday 31st October the UK Prime Minister, Boris Johnson, announced that a second national lockdown will be taking place from Thursday 5th of November 2020. The lockdown will last until the 2nd of December, meaning that all non-essential businesses will be shut for a month, including restaurants, gyms, pubs and other non-essential stores.
Thousands of businesses across the UK have been hit hard by the Coronavirus pandemic and fighting for survival during this last year. Unfortunately, the second national lockdown is likely to result in hundreds of lost jobs and closed businesses..
To help companies and their employees during this time, the government has taken certain measures. Here’s what you need to know:
Extension of the furlough scheme
The furlough scheme was introduced back in March and it helped many people save their jobs. The scheme has been covering 80% of employee’s wages, either when their workplace is closed or when they are not able to work because of Coronavirus.
The government has decided to extend the furlough scheme until the end of the month-long lockdown, and so will continue to cover 80% of employee’s wages (with the maximum of £2,500 per month). This leaves employers paying National Insurance contributions and the pensions.
To qualify for the extension, employees need to have been on the payroll before 30th of October 2020. They don’t need to have been fulroughed before that to be eligible. Additionally, employees with any type of contract can qualify, including part-time and zero hour, although those will need to provide more detail.
What other financial help is available?
Besides the furlough scheme, there are also a number of grants and other government support schemes available. These include:
- The Local Restrictions Support Grant for businesses that had their premises forced to close. You can get up to £3,000 per month from this grant.
- £1,000 given to companies for every furloughed employee that has been kept on until at least the end of January.
- To help young people find jobs, the government will pay £2,000 for every apprentice under 25-years-old taken on until the end of January, or £1,500 if they are over 25.
- Similarly, a £1,500 for every unemployed 16-24 year-old that is taken on for a “high quality” six month work placement.
- The government has extended the deadlines for Coronavirus loans, including the Bounce Back Loan and the Coronavirus Business Interruption loans. You can now apply for them up until 31st of January 2021.
Support for self-employed people
The self-employed income support scheme (SEISS) is set to be open for two further grants in the next six months. The third grant (for the period of November to January) has been doubled to cover 40% of average monthly profits, up to £3,750 for the three months. The details for the fourth grant (for February to April 2021) are yet to be announced by the government.
In addition to the SEISS grants, self-employed people are also able to apply for Universal Credit (UC) that covers a part of their average profits that have been affected due to Coronavirus.
What comes after the lockdown?
At the end of the lockdown, in December, the furlough scheme will come to an end. All areas of the country will be classed into tiers again and local restrictions applied, if necessary.
However, there will be a new Job Support Scheme to further support businesses. Under this scheme, the government will cover 67% of the wages (up to £2,083.33 a month) for businesses that have to close down due to local restrictions.
There will also be help available for businesses that can only afford to bring back employees part-time. The employer will have to pay their employees to work for a minimum of 20% of their hours per month as well as cover 4% extra of total wages. The government will then pay 49% of the total salary to cover the hours not worked, overall giving the employees at least 73% of their salaries. There is a maximum amount of £1,541.75 that the government will contribute per month.
Get our help and support..
We understand that this time is extremely tough for businesses, which is why we are ready to provide you with any support you need.
We are a professional team of accountants with nearly two decades of business experience. We can give you a hand applying for financing, plan your business strategy or advise you on the necessary business decisions to survive the second lockdown.
If you think we can help you, don’t hesitate to get in touch. Call our friendly team on 01202 755600 or drop an email to firstname.lastname@example.org.