Business support schemes have been extended in light of the new lockdown.
Chancellor Rishi Sunak has announced further support for UK businesses impacted by Covid-19. Speaking on 5 November 2020 he stated that additional help would include an extension of the furlough scheme and a higher level of grant for the self-employed. Other funding and grant schemes have been extended until the end of January 2020.
Here’s a round-up of the principal support schemes with links to learn more.
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme (CJRS) or furlough scheme has been extended until the end of March with employees receiving 80% of their current salary for hours not worked. Businesses will have flexibility to use the scheme for employees for any amount of time and shift pattern, including furloughing them full-time.
There are 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 CJRS extension will be reviewed in January to consider if employers will be asked to increase contributions.
Self-Employment Income Support Scheme
The Self-Employment Income Support Scheme (SEISS) has also been extended with two further grants each available for three-month periods covering November 2020 to January 2021 and February 2021 to April 2021. The grant covering November to January will be calculated at 80% of average trading profits (up from 55%), up to a maximum of £7,500.
Details of the February to April 2021 grant have not been released. The online service for the next grant will be available from 30 November 2020.
The Coronavirus Business Interruption Loan Scheme
The Coronavirus Business Interruption Loan Scheme (CBILS) has been extended until 31 January 2021. The scheme is operated by the British Business Bank through accredited lenders. A maximum of £5m can accessed via term loans, overdrafts, invoice finance or asset finance. CBILS gives the lender a government-backed guarantee for the loan repayments to encourage more lending and the borrower remains fully liable for the debt.
Bounce Back Loan Scheme
The deadline for applications to the Bounce Back Loan Scheme (BBLS) has been extended until the end of January 2021. The scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000. The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.
Businesses who have borrowed less than the maximum (i.e. the lower of £50,000 or less than 25% of their turnover) will be allowed to top-up their existing loan.
The deadline for the Future Fund has also been extended until 31 January 2021. The Future Fund provides government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors.
Government guidance states: “These convertible loans may be an option for businesses that rely on equity investment and are unable to access other government business support programmes because they are either pre-revenue or pre-profit”.
The Jobs Retention Bonus
The Jobs Retention Bonus (JRB) was devised to encourage employers to keep people in work until the end of January. However, with the new lockdown and the CJRS being extended to the end of March 2021, the scheme is being shelved and the JRB will not be paid in February. The government has said it will redeploy a retention incentive at the appropriate time.
Support for Devolved Administrations
The Chancellor also announced an additional £2bn in support to the Scottish and Welsh governments and the Northern Ireland Executive.
Find out what help may be available to you or your business with this government business support finder tool.