The government announced on Friday (9 October), an expansion of the Job Support Scheme to provide temporary support to businesses whose premises have been legally required to close as a direct result of coronavirus restrictions.
Under this expansion, affected businesses will receive grants towards the wages of employees who have been instructed to and cease work. This will cover businesses that, as a result of restrictions set by one of the four governments of the UK, are legally required to close their premises, or to provide only delivery and collection services from their premises.
The government will pay two thirds of employees’ usual wages, up to a maximum of £2,100 per month. You will not be required to contribute towards wages, but do need to cover employer National Insurance and pension contributions.
You can apply for the JSS including the new expansion even if you haven’t previously used the Coronavirus Job Retention Scheme (CJRS). JSS is available for six months, from 1 November, with payment of grants in arrears from early December. The scheme will be reviewed in January.
Further information can be found at https://www.gov.uk/government/news/job-support-scheme-expanded-to-firms-required-to-close-due-to-covid-restrictions.
As part of the Winter Economy Plan the Self-Employment Income Support Scheme (SEISS) will be extended under the name SEISS Grant Extension. The grant:
- will be limited to self-employed individuals who are currently eligible for the SEISS, and
- will be available to individuals who are actively continuing to trade but are facing reduced demand due to COVID-19.
The scheme will last for six months, from November 2020 to April 2021, and will consist of two grants. The first grant will cover a three-month period from the start of November until the end of January. This initial grant will cover 20% of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £1,875 in total. The second grant will cover a three-month period from the start of February until the end of April. The government will review the level of the second grant and set this in due course.
The amount of the first grant under the SEISS grant extension will be significantly less than the grants made under the SEISS. The initial SEISS grant was based on 80% of profits (capped at £7,500) and the second SEISS grant was based on 70% of profits (capped at £6,570).
The Bounce Back Loan Scheme (BBLS) has provided support to many UK-based small businesses. Loans are between £2,000 and £50,000, capped at 25% of turnover, with a 100% government guarantee to the lender. The borrower does not have to make any repayments for the first 12 months, with the government covering the first 12 months’ interest payments. Under a Pay as you Grow scheme businesses will have options to:
- repay their loan over a period of up to ten years
- move temporarily to interest-only payments for periods of up to six months (an option which they can use up to three times)
- pause their repayments entirely for up to six months (an option they can use once and only after having made six payments).
CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME
The Coronavirus Business Interruption Loan Scheme provides loan facilities to UK-based businesses with turnover under £45 million. The scheme provides loans of up to £5 million with an 80% government guarantee to the lender. The government does not charge businesses for this guarantee and also covers the first 12 months of interest payments and fees.
The government has announced that as part of the Winter Economy Plan it intends to allow CBILS lenders to extend the term of a loan up to ten years.
The government is also extending the CBILS and BBLS to 30 November 2020 for new applications.
Applications for the Coronavirus Large Business Interruption Loan Scheme and the Future Fund will also be extended.