Lockdown 2.0 - financial support for businesses and the self-employed
With the second national lockdown due to come into effect on 5 November, we run through the new and extended measures that the government is putting in place to support businesses and the self-employed. We’ll be open and here for our amazing creative community, so do get in touch if you have concerns or questions.
The Self-Employment Income Support Scheme Grant Extension
The Self-Employment Income Support Scheme Grant Extension will provide support to the self-employed in the form of two grants, each available for three month periods covering November 2020 to January 2021 and February 2021 to April 2021. The grants are taxable income and also subject to National Insurance contributions.
The online service for the next grant will be available from 30 November 2020. HMRC will provide full details about claiming and applications in guidance on GOV.UK in due course.
The first grant will cover a three-month period from 1 November 2020 until 31 January 2021. The Government will provide a taxable grant covering 55% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £5,160 in total.
The second grant will cover a three-month period from 1 February 2021 until 30 April 2021. The Government will review the level of the second grant and set this in due course.
To be eligible, self-employed individuals must: have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants) declare that they intend to continue to trade and either are currently actively trading but are impacted by reduced demand due to coronavirus or were previously trading but are temporarily unable to do so due to coronavirus.
What we know
The furlough scheme has been extended to December. This covers all of November, including the 1st-5th. Government contributions mirror those available under the more generous furlough scheme that was in place in August.
Employees can receive up to 80% of their wages for hours not worked, to a max of £2,500. Businesses will need to pay National Insurance and Pension contributions. Employees on payroll as of 30th October are eligible and don’t need to have previously been furloughed by you or another business. You can have fully flexible furlough, with employees able to work part time or not at all.
What we don’t know
We don’t yet know what the Pay Reference Period will be. Previously, the government looked at income from February 2020 to determine what 80% of an employees’ salary would amount to. We think this will be October as this is an extension and employees need to be on payroll on the 30th October but this has yet to be clarified.
The Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends.
Mortgage payment holidays will no longer end today. Borrowers who have not yet had a mortgage payment holiday will be entitled to a six month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.
Businesses required to close will be eligible for grants:
- 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
Each Local Authority will also have a discretionary grant scheme, and they will set their own criteria but may include other businesses who either not rateable but will be impacted and also have some fixed property costs (e.g. some B&Bs, shared offices etc.); and possibly, are not ordered to close but are still heavily impacted e.g. wedding sector unlikely to be available for those businesses who work from home.
If you have any questions about the article or your accounting needs, get in touch on 0203 026 4679 or at firstname.lastname@example.org.
This article is a general summary only. It should not replace accounting advice tailored to your specific circumstances.
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