Chancellor unveils new economic support for November to March
6 Nov 2020 10:41 AM
New economic support is provided to help mitigate the impact of restrictions on social and economic life across the UK
Following a rise in COVID-19 infections and the return of restrictions on social and economic life across the UK the Chancellor has announced new economic measures to support businesses and their employees.
techUK has summarised the key announcements below. Further details of all financial and economic support available from the UK Government can be found here.
As well as UK wide schemes more localised support is available from local authorities in England, as well as from the Scottish, Welsh and Northern Irish devolved administrations.
In a statement to the House of Commons the Chancellor has said that the Government will introduce the following schemes across the UK:
Extend the Coronavirus Job Retention Scheme (CJRS); the scheme which was due to end at the beginning of November will now continue until the end of March. The CJRS or furlough scheme will allow employees to receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month.
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 CJRS will operate as the previous Scheme did, with businesses being able to claim either shortly before, during or after running payroll.
Full details of how claims can be made will be published by HMRC on November 10th and claims will be able to be made from 8am Wednesday 11 November. However please note claims made for November must be submitted to HMRC by no-later than 14 December 2020.
Neither the employer nor the employee needs to have previously claimed or have been claimed for under CJRS to make a claim under the extended. Employees that were employed and on the payroll on 23 September 2020 (the day before the original 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.
Businesses will have flexibility to use the scheme for employees for any amount of time and shift pattern, including furloughing them full-time.
The scheme will be reviewed in January to determine whether the employer contribution should be increased or not.
Job retention bonus scheme falls away; as result of the extension of the CJRS the Job Retention Bonus scheme will fall away, rather than being paid in February. The Chancellor has said that a retention incentive will be looked at when the time is right.
Additional support for the self-employed; the Government has announced an increase in the amount paid under the Self-Employment Income Support Scheme (SEISS) to 80% of trading profits covering November to January.
HMRC aims to pay the grant before Christmas, with claims able to be made from 30 November.
The Government has already announced that there will a further SEISS grant period covering February to April. Further details, including the level, of the February to April grant in due course.
Extension of Coronavirus interruption loans; the Government has announced that it will extend the application deadline for coronavirus interruption loan schemes – that is, the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, Future Fund, and Coronavirus Large Business Interruption Loan Scheme – to the end of January 2021.
The previous deadline was 30 November 2020. Details of the various loan schemes can be found here.
The Bounce Back Loan Scheme rules will be adjusted to allow businesses who have borrowed less than their maximum (i.e. the lower of £50,000 or less than 25% of their turnover) to top-up their existing loan. Businesses will be able to take-up this option from next week. They can make use of this option once.
More money is also being made available to support the continuation of match funding through the Future Fund.
The repayment options for these loans have changed to allow for longer term and more flexible repayments. Details of this can be found in the Government’s Winter Economy Plan.
Support for local and Devolved Government; businesses in England that are forced to close due to national or local restrictions will be eligible to receive up to £3,000 per month in grant funding.
Local Authorities in England will receive one off funding of £1.1 billion to support businesses more broadly over the coming months. They can use this at their discretion.
An additional £2bn of funding will be provided for mitigations in Scotland, Wales and Northern Ireland. This money will be allocated by the Scottish Government, Welsh Government and Northern Ireland Executive respectively.
This is in addition to UK wide schemes such as the extension of CJRS, SEISS grants and coronavirus interruption loan extensions.
Full details of the package announced by the Chancellor can be found here. Members should monitor the HMRC and HM Treasury webpages for additional information in the coming weeks.