Lockdown 2 – Support for Businesses

On Saturday, the Prime Minister announced that we would be moving to another lockdown. Over the past few weeks, the Chancellor has announced a number of measures to support businesses and with the statement on Saturday came some additional help. As always, we need to put a health warning on these headline announcements, as the guidance will follow later and may include finer details:

• Furlough Extended
  • The furlough scheme, which we thought was coming to an end on Saturday, has now been extended for another month
  • In November, the scheme is more beneficial than September and October and the Government will now cover the full 80% of employee’s earnings
  • Employers, as in August, will need to meet any National Insurance and Pension costs
  • There has been a reset in dates. To be eligible, employees need to be on the payroll by the end of 30 October 2020 (the previous date was 23 March 2020). This will be a benefit to many who were previously excluded
  • Employees do not need to have been furloughed previously
  • Flexible or part time furlough is allowed
  • Any furlough arrangements must be for a minimum of 7 days
  • Our recommendation is that because furloughing staff is effectively a change in contract that written agreements are reached with staff. We have template letters should you require them
• Self Employment Income Support Grant
  • There were no new announcements on this scheme and the 40% level is still anticipated
  • It is expected that the next claim window will open from 14 December
• Local Restrictions Support Grant
  • This scheme now comes into effect in all areas of England
  • Additionally, the sums available have been increased to
    • For properties with a rateable value of £15K or under, grants to be £1,334 per month
    • For properties with a rateable value of between £15K-£51K, grants to be £2,000 per month
    • For properties with a rateable value of £51K or over, grants to be £3,000 per month
  • To qualify for the scheme businesses must:
    • Occupy a property on which it pays business rates (if you are in receipt of small business rates relief and effectively pay no rates, you still qualify)
    • Be closed for a period of at least 3 weeks
    • Have been unable to provide its usual in-person customer service from its premises. The guidance suggests that this covers scenarios where restaurants are forced to close, but still operate a takeaway service i.e. the business still qualifies for the grant
  • For those businesses who do not pay business rates there is a discretionary grant of up to £1,500. This will also cover businesses who are not closed completely, but who are severely affected by the lockdown
  • District Local Authorities will administer these grants, but as of this morning neither Teignbridge and Mid Devon websites were showing any details and I suspect they are still awaiting guidance from Government
• Mortgage Holidays
  • This scheme has been extended past the October end date
  • Borrowers are still entitled to a total of 6 months mortgage holiday, meaning if you have not already used the whole of the 6 months, this can still be used

There are also some other items of news this week that you may find of interest:

• Bounce Back Loans
  • Many have taken out the bounce back loan. For those who have not yet taken up the loan option, please be aware that the scheme has an end date of 30 November. Therefore, if you think taking the loan would be a safe option then get your application in
    • The loans are up to £50,000, based on turnover
    • Repayment period of up to 10 years, with nothing to pay in the first year
    • Interest is only 2.5%, payable after year 1

The Chancellor may make additional announcements, as the situation feels quite fluid. We will bring any such news to you as soon as we get it.

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Best wishes and stay safe