Winter 2020-2021 Business Support Guide
The Chancellor’s Winter Economic Plan
Since the onset of the coronavirus pandemic, many businesses and individuals have benefited from a range of schemes, including furlough grants for staff unable to work, grants for the self-employed, deferral of VAT and Income Tax payments and cheap, government-backed business loans.
With the second wave of coronavirus infections upon us, the whole of England entered a national lockdown from 5 January, while Wales, Scotland and Northern Ireland have imposed local or national restrictions for some weeks now.
To help businesses that are required to close, the Chancellor has extended the existing Coronavirus Job Retention Scheme (CJRS), which was due to end on 31 October, until 30 April 2021. The CJRS has also been made more generous from 1 November than it was in October, as it will now cover 80% of employees’ normal pay for their furloughed time, capped at £2,500 per month. The employer will be required to pay the employer’s National Insurance Contributions and minimum workplace pension contributions due on their employees’ wages.
Note that the financial support for businesses to pay their employees applies across the UK, while the lockdown rules are different in each country.
The two job support schemes that were due to replace the CJRS (JSS Open and JSS Closed) are now not needed, although a version of them (no doubt with amended rules) may be introduced when the CJRS finally comes to an end.
The Job Retention Bonus, which was due to be paid in February 2021, has been scrapped due to the extension of furloughing. In addition, employers will be able to use the Kickstart Scheme to give young people six months’ government-paid work experience.
There will also be further grants for the self-employed. For those who qualified for the first two grants, a third grant will be based on 80% of previously reported average profits. The three-month grant will be capped at £7,500. Details of the fourth grant have not yet been announced.
Further VAT and Income Tax deferrals will also be available in 2021, to help the cashflow of businesses and individuals.
Retail, leisure and hospitality businesses that are required to close in England can also apply for cash grants from their local authority of up to £9,000. Different levels of grants are available for businesses to claim from local authorities in Wales, Scotland and Northern Ireland.
Enhanced support for care workers in Wales will allow them to receive full pay while on COVID-related sick leave.
Most small and medium-sized employers can reclaim the COVID-related SSP paid to their employees.
In this newsletter we explain what has been announced so far on these new business support measures.
You can read the full Business Support Guide here.