Old Mill Updates

COVID-19: Furlough scheme extended and further support for the self-employed announced as we go back into lockdown

Over the last few days the Prime Minister has had to respond quickly as the government battles to suppress the rate of coronavirus infections whilst, at the same time, support businesses and protect wages. 

On Saturday 31 October, just a matter of hours before the furlough scheme was due to end, the government announced an extension of its original furlough scheme on the back of its decision to reintroduce a second national lockdown from Thursday 5 November. 

This afternoon, in the House of Commons, Mr Johnson announced fresh help for the self-employed. 

2nd November 2020

The Coronavirus Job Retention Scheme was to be replaced by the less generous Job Support Scheme on 1 November but the state will now revert to the original furlough scheme where employees receive 80% of their pay up to a maximum of £2,500 per month with the employer covering pension and national insurance contributions.

Click here for full details.

Employers will be able to bring back employees part-time and furlough them for the rest. In order to be eligible for this extension, employees must have been on the payroll by 30 October but, crucially, they don’t need to have been furloughed previously.

In the interim, whilst the system is adjusted, employers should submit their wage claim to the government, and they will be refunded afterwards. After that, they will be paid upfront to cover the cost.

At this moment in time the proposed lockdown is set to end on 2 December and the latest furlough scheme will end then but there has already been speculation that lockdown may run longer so the situation is fluid.

The country will then revert to a tiered-based approach to contain the spread of the disease and the Job Support Scheme will replace the Coronavirus Job Retention Scheme providing a reduced level of support to employees of firms legally forced to close as well as assisting employees of firms that only have enough work for their workforce to work part-time.

Additional support for businesses

Under this latest package of measures the government will provide businesses with grants:

  • For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 every two weeks;
  • For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 every two weeks;
  • For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 every two weeks.

In the Commons on Monday 2 November, Mr Johnson announced support for the self-employed ahead of the new month-long lockdown:

  • Under the latest iteration of the Self-Employment Income Support Scheme (SEISS), self-employed workers will receive 80% of their average trading profits for November
  • These grants will also be paid faster than previously planned, with the claims window being brought forward from 14 December to 30 November
  • The SEISS is calculated over three months so this increases the total grant from 40% to 55% of trading profits for November to January so the maximum grant will increase to £5,160
  • The government is also acting to allow more businesses to benefit from government loan schemes by extending the deadlines for applications with CBILS, the Bounce Back loan and future fund applications extended from the end of this month to 31 January 2021.

For further information please contact your usual Old Mill adviser or click here