On Saturday 31 October, the Prime Minister announced another full lockdown across England from Thursday 5 November to Wednesday 2 December.
Which businesses need to close?
- All non-essential retail, however, these businesses can remain open for delivery and for customers to click and collect.
- Indoor and outdoor leisure facilities.
- Entertainment venues.
- Personal care facilities.
- Hospitality venues, however, these businesses can still provide takeaway and delivery services except for takeaway alcohol.
- Hotels must only be open to those who have to travel for work purposes, and a limited number of other exceptions still to be announced.
The CJRS was due to end on Saturday 31 October. Considering the newly announced lockdown, the Government has extended the Scheme until the end of March 2021.
The CJRS extension scheme is more generous than it was in October, and is effectively reverting to the rates used in August, that being that employers can reclaim 80% of the gross wages of hours not worked, but the employer will be liable for National Insurance and Pension contributions relating to the employee.
The scheme is going to allow both full time furlough and flexible furlough to be used, and businesses do not need to be closed in order to use the scheme.
The eligibility to the scheme has not changed, however employees now must have been on a payroll submission to HMRC between 00:01am on 20 March and 23:59pm on 30 October, meaning the scheme is now open to employees that may not have previously qualified.
Neither the employer nor the employee need have previously taken advantage of the CJRS scheme to qualify.
The calculation for furlough pay and the ‘usual’ hours has changed for those employees who have not previously been furloughed, meaning we now have two methods of calculation to use.
Employees previously furloughed
Use the original furlough reference pay and usual hours calculation:
Salaried employees – the last pay run prior to 19 March 2020.
Variable paid employees – the 2019/20 average pay or the pay in the same month of 2019/20.
Newly furloughed employees
Use the new furlough reference pay and usual hours calculation:
Salaried employees – the last pay run prior to 30 October 2020.
Variable paid employees – the average pay between 6 April 2020 (or the employee start date if later) and the last pay run prior to 30 October 2020.
Claims under the extended scheme can be made from 11 November, and claims must be for a minimum of seven consecutive days and all claims for the month of November must be made by 14 December.
It has now been confirmed that the CJRS grant available will remain at 80% until the end of January 2021, at which point this will be reviewed.
The Job Support Scheme that was due to begin on Sunday 1 November, has been postponed until the end of the CJRS.
Job Retention Bonus
The £1,000 Job Retention Bonus that was due to be paid in February for those workers retained by employers during the months of November, December and January has been postponed. The incentive will be ‘redeployed’ at a future appropriate time. We will provide more guidance as it is released.
Local Restrictions Support Grant (England)
Any businesses which have business premises that are legally required to close in England due to the new restrictions will be eligible for a grant. These grants are calculated based on the Rateable Value of the business as follows:
Rateable Value Grant received £15,000 or under £667 per fortnight / £1,334 per month £15,001 to £51,000 £1,000 per fortnight / £2,000 per month £51,001 or above £1,500 per fortnight / £3,000 per month
To be eligible for the grant you must meet the following criteria:
• Open as usual before the restrictions (or your business has had to remain closed on a national basis since 23 March, for example, nightclubs)
• Providing services in person to customers from the premises
• Required to close due to restrictions imposed by government
• Paying business rates for the premises before restrictions commenced
If your business has already received the Small Business Grant earlier in the year, many Local Authorities will be able to process your grant more quickly.
Applications must be made via your Local Authority using the links below:
Carlisle (Open) – https://www.carlisle.gov.uk/news-and-events/update-on-services-6
Copeland (Open) – https://www.copeland.gov.uk/business-support-grant
Eden District Council will contact eligible parties directly – https://www.eden.gov.uk/your-council/news/media-releases/eden-district-councils-business-support-grants-17-november-update/
Additional Restrictions Grant (England)
This grant will be available to support businesses that have been severely impacted however they have not legally been forced to closed, or those businesses forced to closed but who do not pay business rates.
The full guidance has not been released regarding this grant and we will update this page as soon as further information is made available.
Strategic Framework Business Fund (Scotland)
This is for Scottish businesses that are required to close by law or significantly change its operations as a result of Coronavirus restrictions from 2 November 2020. Grants will be paid every 4 weeks in arrears. The first payment of this grant funding is due on or around 30 November 2020.
Applications to the Strategic Framework Business Fund should be made through your local authority website.
Find out more here.
Self Employed Income Support Scheme (SEISS)
On Monday 2 November, the Prime Minister announced that the third round of the SEISS grants have been increased from the revised 40% announced in the Winter Economy plan revision.
The grant is calculated on 80% of trading profits for November, December and January.
The most recent update to the scheme brings the maximum grant to £7,500.
This grant scheme is only available to those who were continuing to actively trade but faced reduced demand due to the Coronavirus pandemic and those who were eligible for the original SEISS, with the first round in in May 2020, and the second round in August 2020.
The third-round grant will cover the three month period from November 2020 until January 2021, while the fourth round will cover the period February 2021 to April 2021.
You are able to claim for the third round from 30 November.
The level of the fourth grant has not been announced at this stage.
To qualify for the SEISS payment, the following must apply:
- You must have submitted your 2018/19 Self-Assessment tax return on or before 23 April 2020,
- Self-employed profits must have been less than £50,000.
- Self-employed profits must be more than 50% of your total income for the year.
Bounce Back Loans (BBL) and Coronavirus Business Interruption Loan Scheme (CBILS)
The deadline for applications for BBLs and CBILS, and also the Future Fund and Coronavirus Large Business Interruption Loan Scheme have been extended to 31 January 2021. The BBL rules have also been adjusted to allow businesses who have already borrowed less than the maximum (£50,000 or 25% of turnover) to ‘top-up’ their existing loans. This will be allowed from 10 November and businesses can only top-up loans once.
Mortgage and Consumer Credit Holidays
Mortgage holidays were due to end on Saturday 31 October. The government has now announced that any borrowers who have not already taken a payment holiday will entitled to a six-month payment holiday. Any borrowers who have already taken a previous payment holiday, will be able to top up the holiday to six months without this being recorded on their credit file.
The above extension also applies to consumer credit products such as personal loans and car finance.
High-cost, short-term borrowing, such as payday loans will continue to be entitled to a maximum one month payment holiday.
Statutory Sick Pay (SSP)
The Government is continuing to allow small and medium-sized businesses to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to Coronavirus. This includes employees self-isolating as a precaution and employees following advice to stay at home. Employees must earn on average at least £118 per week before tax. You can only reclaim two weeks per employee, even if that employee has to isolate more than once.
This refund will cover up to two weeks’ SSP per eligible employee who has been off work because of Coronavirus.
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 at 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 Coronavirus.
Employers should maintain records of staff absences, but employees will not need to provide a GP fit note for the first 7 days. After 7 days of absence, it is at the discretion of the employer.
The eligible period for the scheme commenced on 14 March 2020, the day after the regulations on the extension of Statutory Sick Pay to self-isolators come into force.
Coronavirus related SSP can be reclaimed online at https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-your-employees-due-to-coronavirus-covid-19
Difficulty paying HM Revenue and Customs (HMRC)
If you have any difficulty in paying HMRC as result of the Coronavirus pandemic, HMRC has strengthened its Time to Pay arrangements to support you.
Please contact HMRC directly on 0800 0159 559 ensuring you have details of an affordable plan ready to discuss.
VAT Reduced Rate
The VAT Reduced Rate for food and drinks has been extended to 31 March 2021.
Many restaurants and cafes have opened as a takeaway due to the impact of Coronavirus. We have highlighted some VAT considerations for hot and cold takeaway foods that could apply to you:
Hot takeaway food will continue to be subject to VAT at 20% (standard-rated).
Typical examples of food and drinks that are standard-rated if sold hot are:
- Chips sold on their own or as part of a meal
- Chinese, Indian and similar take-away meals and dishes
- Baked potatoes with a hot or cold filling
- Toasted sandwiches
- Cups of tea, coffee, chocolate etc
- Cups of soup
However some cold takeaway items can be zero rated for VAT purposes, examples include:
- Biscuits (biscuits wholly or partly covered in chocolate are standard rated)
- Chilled or frozen ready meals designed to be cooked at home
There are some food items that are standard rated regardless of how they are sold they include
- Ice cream
- Fizzy drinks
For further information or advice on how the rules on hot and cold takeaway food effect your business please contact us.
Cashflow Top Tips
Here are our top tips to help you deal with the challenges that you may be facing:
- Review your direct debits and standing orders to ascertain which payments are business critical.
- Determine whether your staffing levels are adequate and seek advice if you need to reduce the work force/hours. Utilise the Job Retention Scheme where possible.
- Understand what your debt obligations are (both for the business and the directors personally) and seek to negotiate payment holidays if appropriate.
- Seek rent payment holidays where possible.
- Speak to your customers to obtain payment dates for outstanding debtors – consider their ability to pay if agreeing to longer terms. For any customers who are not responding, consider getting in touch with our Recovery Solutions team.
- Negotiate with suppliers to ensure your ongoing orders can be sourced and delivered; identify alternative suppliers for any business critical item.
- Ongoing funding is likely to be a concern for many. If you cannot demonstrate to a funder that you have taken the above steps then it will be more difficult to obtain. Now is the time to take action, even if you have a buffer that may see you through a short period. Review lending options including the BBL and CBIL Schemes.
- Can you temporarily extend your overdraft facility?
- Contact your finance providers as soon as possible to discuss Hire and Lease Purchase payment holidays. It is always better to agree repayment holidays with your finance providers upfront as this should not affect your credit rating going forward.
- Are your vehicles off the road? Could you SORN them? Visit gov.uk/make-a-sorn to do so.
- Review your insurance cover
Consider reducing your level of cover to accidental damage, fire and theft if you are completely certain the vehicle(s) will not be manoeuvred or driven. If not, you should maintain full cover.
- Adhere to insurer requirements
Look carefully at your policy wording for any specific stipulations and follow any recommendations provided by your insurer, for example keeping your vehicle(s) in a securely locked compound.
The Chancellor has announced that the Self-Employed can now access Universal Credit basic allowance at a rate equivalent to statutory sick pay for employees.
What is it?
If you are on a low income or are out of work, the payment is intended to help with living costs.
- You’re on a low income or out of work
- You’re 18 or over (there are some exceptions if the claimant is 16 to 17)
- You’re under state pension age (or your partner is)
- You and your partner have £16,000 or less in savings between you
- You live in the UK.
How much will I receive and when?
- Universal Credit is made up of a standard allowance of £94.25 a week, and some people may be able to get additional amounts, due to their circumstances. This can include if they have children, or if they have a disability or health condition which prevents them from working, or need help in paying rent.
- The payment is usually made monthly – although this may be more frequent in Scotland.
What additional allowances are available in addition to the basic allowance?
- It’s possible to access independent benefits calculators online, in order to see how much you can get.
- Your circumstances are assessed each month, and changes in circumstances can affect how much you are paid for the whole assessment period – not just from the date that the changes are reported.
Universal Credit basic allowance has been increased by £1,000 per year (£19.23 per week).
Working Tax Credit has been increased by £1,000 per year (£19.23 per week).