Lockdown financial support: furlough scheme extension and other changes
It probably didn’t come as a surprise to many, but now it’s official. From Thursday 5 November 2020, England goes back into a nationwide lockdown until at least 2 December. The measures are deemed necessary to take pressure off the NHS, but the stark fact remains that it will wreak financial havoc on many businesses, families and individuals. Government acknowledges this and has announced that lockdown financial support will change in a number of ways. This post is designed to summarise what support packages are now available, as well as who qualifies for them.
1. Furlough Scheme extension
Perhaps the most substantial change is an extension to the Coronavirus Job Retention Scheme, or ‘Furlough Scheme’.
This was going to be replaced on 1 November by the less generous Job Support Scheme. This has now been postponed. Instead, the original furlough scheme will be extended until (at least) 2 December. Under this scheme, Government will pay 80% of employees’ wages for hours not worked, up to a cap of £2,500 monthly. Employers will still need to pay employer’s NICs and pension costs.
Flexible furlough is still allowed, though employers have to meet the costs for any hours their employees work. Employers can also top up the 80% contribution from government if they want to.
Employers are eligible if they have a UK bank account and PAYE scheme. They do not need to have made a claim under the Coronavirus Job Retention Scheme before.
Employees are eligible if they have been on their employer’s PAYE scheme since 30 October 2020. A RTI submission notifying payment for an employee much have been made to HMRC on or before the same date.
Government will announce when November claims can be made. Employers will need to report and claim for a minimum of seven consecutive calendar days.
Further details on this form of lockdown financial support has been published by government on this page.
2. Payment holidays
The Financial Conduct Authority (FCA) has announced an extension to payment holidays on mortgages, credit cards, personal loans, car finance and other forms of consumer credit. This will last during November and the FCA will update its guidance on 2 December.
With regard to mortgages:
- If you haven’t had a payment holiday, you can ask for one
- Or, if you’ve begun a payment holiday, you can extend it up to six months
- If you’ve had a six-month payment holiday, you need to speak to your lender about ‘tailored support’
- Don’t contact your lender yet – the FCA says lenders will provide you with information soon.
With regard to consumer credit arrangements:
- If you haven’t had a payment holiday, you can apply for one of up to six months
- If you’re on your first payment holiday, you can apply for second.
For more information, see the FCA website for Coronavirus consumer support.
3. Grants for businesses required to close
If your business is required to close under national lockdown restrictions, you will be eligible for a grant based upon rateable value. The grant values are as follows:
- Rateable value (RV), £15,000 or under: £1,334 per month or £667 per fortnight
- RV, £15,000 to £51,000: £2,000 per month or £1,000 per fortnight
- RV, £51,001 or more: £3,000 per month or £1,500 per fortnight
4. Self-Employed Income Support Scheme
As yet, there have been no further announcements regarding this form of lockdown financial support. The third SEISS grant will still cover November to January and be worth 40% of average monthly profits. You can find out more on the gov.uk website, here.
As always, if you are a THP client and you need advice on lockdown financial support, please speak to your account manager. We’d be very happy to help.
About Jon Pryse-Jones
Since joining THP in 1978, Jon Pryse-Jones has been hands on with every area of the business. Now specialising in strategy, business planning, and marketing, Jon remains at the forefront of the growth and development at THP.
An ideas man, Jon enjoys getting the most out of all situations, “I act as a catalyst for creative people and encourage them to think outside the box,” he says, “and I’m not afraid of being confrontational. It often leads to a better result for THP and its clients.”
Jon’s appreciation for THP extends to his fellow team members and the board. “They really know how to run a successful business,” he says. He’s keen on IT and systems development as critical to success, and he continues to guide THP to be at the cutting edge and effective.