Winter Economy Plan Update

Changes Include:

• Furlough extended to 31 March 2021
• SEISS uplifted to 80% for 3rd Claim
• Rates based grants for business forced to close
• Job Support Scheme & Job Retention Bonus Shelved

This week saw a third and fourth change to the Winter Economy plan in 6 weeks as England enters a second “lockdown” and leaves employers and businesses struggling to track all the changes.  We have again compiled a list of the changes and the various support currently available to businesses.  With no end in sight to the Covid crisis many businesses will be facing tough decisions, but the extension of flexible furlough at the original 80% of unpaid hours at least means employees can be retained at little cost. Business rates based grants will be available to any businesses who pay business rates or receive business rates relief, and are forced to close by the restrictions.

The Self Employed Grant has been increased to 80% of profits for the third grant and a fourth grant will follow at an unconfirmed rate.  Disappointingly there remains no support for the many self-employed who started trading after 5 April 2019, or who earned less than half their income from self-employment before that date. Similarly there is no direct support for small company owners who may have lost income, unless they have business premises or use furlough, small discretionary grants may be available from your local council if not eligible for rates based grant.

Please continue to stay safe and speak to our team if you need support.                                                                                                                             

The changes since our last update

• Businesses which must close
• National restrictions from 5 November 2020 mean everyone in England is allowed to leave home only for specific purposes, they must work from home if they can and many businesses must close full guidance

Furlough (CJRS)                                     

The furlough scheme is extended until 31 March 2021. The Job Support Scheme and Job Retention Bonus are postponed indefinitely. Guidance

Employers do not need to have used the CJRS previously.  Employers can claim for employees who were employed and on their PAYE payroll on 30 October 2020. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.

Employers will have flexibility to use the scheme for employees for any amount of time or shift pattern, furloughing employees on either a full-time or part-time basis, and will be able to vary the hours worked in agreement with the employee. Employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer afterwards can be re-employed and claimed for. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.

Self Employed Support  

The third SEISS grant has been increased to 80% for the whole quarter (initially announced as just November at 80%).  The claim portal will open by the end of November. Be aware that just because the government checker site says you may be eligible, it does not mean you can make a legitimate claim, for instance if  you have not been adversely affected in the quarter, have ceased self employment or do not intend to trade after the crisis you would not be entitled. We have already seen clients have to pay back grants wrongly claimed Claim

Bounce Back Loan /    CBILS 

Loans remain open for application until 31 January 2021, a top up scheme will allow businesses who did not draw down their full possible loan to make a further draw down.  Extended terms and payment holidays were already announced.

Universal credit

We understand that the minimum income floor suspension for self employed will remain until April 2021 Universal Credit

Support measures previously announced

Business Grants                                             

Businesses required to close in England due to local or national restrictions will be eligible for the following:

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

Discretionary grants may be available from local council for those without rates relief.

We suspect that this follow the same application process as previous, but will advise once further information has been released.

Limited Company Directors                         

We understand directors may continue to be on furlough and their companies can benefit from the rates based grant (if they have business rates/relief ). There remains no support for any loss of profit for companies, and resulting inability to draw dividends, although directors may register for universal credit.

Mortgage Holiday                                        

Mortgage payment holidays will no longer end on 31 October. 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. There is a cap of 6 months on any mortgage holidays

Taxes                                                              

As previously outlined most taxes can be deferred and paid over time and we expect HMRC to be flexible in their approach to any outstanding debts.