New restrictions: Financial Update
Throughout this crisis, our priority has been clear: to protect lives and livelihoods. The Prime Minister has announced new national restrictions that will prevent further spread of the virus.
I know how worried people are in Warrington South – about their health, the health of their loved ones, their jobs, their businesses, and their financial security. And that’s why the Government’s economic priority remains the same: protect jobs.
The Government has announced:
- Extending furlough until the end of April for all parts of the United Kingdom last year – meaning businesses across the country will have certainty about what support will be available to them. The Coronavirus Job Retention Scheme was extended last year, with employees receiving 80 per cent of their current salary for hours not worked, up to £2,500 a month. Businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time.
- Providing more support for self-employed people across the United Kingdom. We will provide even more generous support to the self-employed by increasing the support to the self-employed from 40 per cent of trading profits to 80 per cent for November, December and January. These grants are calculated over three months, meaning the maximum grant will increase to £7,500. This is £7.3 billion of support to the self-employed through November to January alone, with a further grant to follow covering February to April. This comes on top of £13 billion of support provided to over 2.6 million self-employed people so far, one of the most comprehensive and generous support packages for the self-employed anywhere in the world.
- Extending the application deadline for loan guarantee schemes – that is, the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and Coronavirus Large Business Interruption Loan Scheme – to the end of March 2021. The schemes have already provided over £68 billion in guaranteed loans, and helped to keep afloat business in all sectors of the UK economy who have been impacted by coronavirus.
- Adjusting the Bounce Back Loan Scheme rules to allow those businesses who have borrowed less than their maximum (i.e. less than 25 per cent 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. We understand that some businesses did not anticipate the disruption to their business from the pandemic would go on for this long; this will ensure that they are able to benefit from the loan scheme as intended.
- Extending mortgage holidays. Mortgage holiday will be extended to reassure homeowners. These were due to end on 31 October, but borrowers who have been impacted by coronavirus and 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.
- Supporting businesses forced to close. Retail, hospitality and leisure business premises forced to close can claim a one-off grant of up to £9,000.
- Providing additional support for local authorities. On 5 January, the Chancellor announced that Local Authorities (in England) will be given an additional £500 million of discretionary funding to support their local businesses.
- Supporting the hardest-hit sectors throughout our response to coronavirus. We have targeted our support at the industries that need it most: we cut VAT for hospitality and tourism from 20 per cent to 5 per cent and extended the cut until March; we provided a £1.57 billion support package for the arts sector. And over 100 million meals were claimed for under the Eat Out to Help Out scheme – protecting 1.8 million jobs in the sector.
- Offering a 12-month business rates holiday for sectors which are struggling with cashflow issues. All eligible businesses in the retail, hospitality and leisure sectors, as well as nurseries, estate agents and bingo halls, will pay no businesses rates for 12 months, from 1 April 2020.10
All schemes available for Employers
Self Employed Income Support Scheme (SEISS)
The Self-Employment Income Support Scheme Grant Extension provides critical 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 Government is announcing that we will provide even more generous support to the selfemployed, and we are increasing the support to the self-employed from 40% of trading profits to 80% for November.
As SEISS grants are calculated over 3 months, this increases the total level of the grant to 55% of trading profits for November to January and the maximum grant will increase to £5,160.
Apply at .GOV HERE
Coronavirus Business Interruption Loan Schemes
We are also announcing that we plan to extend the application deadline for loan guarantee schemes – that is, the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and Coronavirus Large Business Interruption Loan Scheme – to the end of January 2021. This will give businesses two extra months to make loan applications (relative to the current deadline of 30 November).
We will also adjust the Bounce Back Loan Scheme rules to allow those businesses who have borrowed less than their maximum (i.e. 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. We understand that some businesses didn’t anticipate the disruption to their business from the pandemic would go on for this long; this will ensure that they are able to benefit from the loan scheme as intended.
Three schemes are currently available:
1. Bounce Back Loan Scheme (BBLS)
- For SMEs, micro businesses and other businesses requiring smaller loans
- Looking for between £2,000 and £50,000
- Term loan repaid over six years
- No set-up fees and first 12 months of interest payments covered by government
- No repayments during the first 12 months
Apply at .GOV HERE
2. Coronavirus Business Interruption Loan Scheme (CBILS)
- For smaller businesses with a turnover of less than £45 million
- Looking for up to £5 million in finance
- Business loans, overdrafts, invoice finance and asset finance available
- First 12 months of interest and lender-levied fees covered
- More than 40 accredited lenders
Apply at .GOV HERE
3. Coronavirus Large Business Interruption Loan Scheme (CLBILS)
- For larger businesses with a turnover of more than £45 million
- Looking for up to £50 million in finance (depending on turnover)
- Business loans, overdrafts, invoice finance and asset finance available
- Repayment terms of up to three years
These are just some of a number of measures the Government has announced. You can find full details of the measures to support public services, people and businesses through this period of disruption caused by the coronavirus here .
Apply at .GOV HERE
Coronavirus Job Retention Scheme
Under this scheme, the Government covers 80% of the salary of PAYE employees who would otherwise have lost their jobs due to the coronavirus outbreak.
The scheme is open to all employers and covers wages backdated to 1 March 2020. It will continue for at least three months.
Apply at .GOV HERE
Support for business that have to close
Businesses that are forced to close due to national or local restrictions will receive up to £3,000 per month. This is worth over £1 billion a month with the new restrictions in place, and will benefit over 600,000 business premises.
- 90% of small and medium sized business premises in the closed Retail, Hospitality and Leisure sectors should broadly have their monthly rent covered by these grants (based on VOA data on Rateable Values as the best proxy we have for rent).
- Local Authorities in England will also receive one off funding of £1.1 billion to support businesses more broadly over the coming months as a key part of local economies. They can use this at their discretion. This will be distributed to local authorities on the basis of c.£20/head of population. Some of this funding has already been provided to local areas that entered into Tier 3.
- Backdated cash grants for businesses in Tier 2/3 areas. Businesses in hospitality, leisure and accommodation sectors that have been suffering from reduced demand for a while will receive backdated grants at 70% of the value of closed grants up to a maximum of £2,100 per month for this period.
- Timing: We will make allocations to Local Authorities later this week, giving them the cover they need to start making distributions and funding will follow next week.
Apply at .GOV HERE
VAT DEFERRAL
- the government is deferring VAT payments for the next quarter. That means businesses will not pay any VAT from now through to the end of June.
- businesses will have until the end of the financial year to pay back any deferred taxes. This is to help support businesses with their cash flows, and support individuals’ employment.
- over a million businesses of different size and sector are expected to benefit. This is an automatic offer with no applications required.
Read the guidance at .GOV HERE
Covid Corporate Financing Facility (CCFF)
Under this scheme, the Bank of England buys short-term debt from larger companies.
The facility is designed to support liquidity among larger firms, helping them to bridge coronavirus disruption to their cash flows through the purchase of short-term debt in the form of commercial paper.
It supports businesses that have been affected by a short-term funding squeeze and allow them to finance their short-term liabilities.
Apply at .GOV HERE
Statutory Sick Pay (SSP)
- this refund will cover up to two weeks’ SSP per eligible employee who are either ill or been told to self-isolate because of COVID-19. This is in line with the recommended isolation period.
- employers with fewer than 250 employees will be eligible. The size of an employer will be determined by the number of people they employed as of 28 February 2020
- employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
- employers should maintain records of staff absences, but employees will not need to provide a GP fit note
- the eligible period for the scheme began on 13 March
- the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible. Existing systems are not designed to facilitate employer refunds for SSP.
Find out how to claim at .GOV HERE
Business Rates holiday for 1 year from 1 April 2020
- if you are currently receiving the retail discount for your Business Rates bill, you will receive a revised bill with 100% relief shortly
- if your business occupies a property in the retail sector with a rateable value of £51,000 or more, or if your business occupies a property in the leisure or hospitality sectors you may also be eligible for the 100% discount on your business rates bill
- you will shortly hear from your Local Authority. If you have any questions, you should contact your Local Authority
- if you are a nursery, you will be entitled to the 100% relief for the next year. You should contact your Local Authority for more information