The announcement of a second lockdown, starting from Thursday 5th November, rocked the UK this weekend. Although not wholly unexpected, it's a bitter pill to swallow, especially for businesses in the hospitality and leisure industries.
However, the Government has pledged to support businesses and their employees through lockdown with a set of financial schemes similar to those we saw in March. Full details will be announced later this week, but this is what we know so far.
Job Retention Scheme to be extended
The Coronavirus Job Retention Scheme, more commonly known as the furlough scheme, was due to be replaced by the Job Support Scheme at the end of October. Following the recent announcement, the Government has extended the scheme until December.
As Britain came out of lockdown over the summer, the furlough scheme was updated to a less generous form that required employers to pay 20% of their furloughed employees' wages, with the Government paying 60%.
The second lockdown will see the scheme return to its original form, with the Government paying 80% of furloughed employees salaries up to £2,500 per month.
Employers will not be obliged to pay their furloughed workers beyond national insurance and pension contributions. They can also choose to bring back employees part-time and furlough them for unworked hours only.
The furlough scheme was designed to encourage businesses that have been disrupted by lockdown to keep employees on the payroll, rather than making them redundant.
How to claim: employers can claim through GOV.UK. You must pay your employees for their unworked hours prior to making a claim.
Business grants available to closed businesses
Under the Government’s previous support scheme there were two forms of business grants available. One for businesses that were affected by lockdown but able to remain open and one for businesses that were forced to close.
Under the new national lockdown measures, businesses will be able to access the closed business grants.
How to claim: Funding will be delivered through Local Authorities. Visit your council’s website for more information.
Self-Employed Income Support Scheme (SEISS) grant extension
This scheme is available to self-employed individuals whose income has been impacted by reduced demand due to Coronavirus. The extension will last for six months, from November 2020 until April 2021, with two lump sums covering each three month period.
Unlike the furlough scheme, the SEISS extension will not be as generous as it was earlier in the year, covering just 40% of average monthly profits.
How to claim: You will be able to make a claim on GOV.UK from 14th December.
Mortgage holidays to be extended
Mortgage holidays were due to end on 1st November, but these will now be extended. Borrowers will be entitled to a six-month holiday from their mortgage payments. If you have already taken advantage of the previous six-month holiday, you can extend this by a further six months.
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