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Government extends Furlough to March and increases self-employment support scheme

Covid 19 maco1As the lockdown has now started for England and continues elsewhere, the Government has changed its mind again about business supports and decided to extend the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme (SEISS) across all regions of the UK.

The Chancellor has announced that CJRS will be extended until the end of March 2021 for all parts of the UK.

For claim periods running to 31 January 2021, the UK Government will pay 80% of employees’ usual wages for hours not worked, up to a cap of £2,500 per month. The UK Government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.

It was also confirmed that the Job Retention Bonus will no longer be paid in February 2021, as CJRS will be available at that time. An alternative retention incentive will be put in place at the appropriate time.

The CJRS will remain open until 31 March 2021. For claim periods running to January 2021, employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. The £2,500 cap is proportional to the hours not worked.

The Government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.

Claims can be made by employers across the UK that meet the eligibility criteria.

Similarly, support for millions more workers through the Self-Employment Income Support Scheme (SEISS) will be increased, with the third grant covering November to January calculated at 80% of average trading profits, up to a maximum of £7,500.

Further updates announced week commencing 2 November were:

  • Grants of up to £3,000 per month for businesses which are closed worth more than £1 billion every month
  • £1.1 billion is being given to Local Authorities, distributed on the basis of £20 per head, for one-off payments to enable them to support businesses more broadly
  • Plans to extend existing government-backed loan schemes and the Future Fund to the end of January, and an ability to top-up Bounce Back Loans
  • An extension to the mortgage payment holiday for homeowners
  • Up to £500 million of funding for councils to support the local public health response

There have been many announcements this past week; below we have summarised the key highlights and support links to keep you updated. If you require any further assistance please do not hesitate to get in touch with your usual Martin Aitken contact.

Key highlights

 

Extension of the Coronavirus Job Retention Scheme (CJRS)

After the Chancellor’s statement that the CJRS will be extended to 31 March 2021, HMRC have released a policy paper: “Extension of the Coronavirus Job Retention Scheme”MACO TPL business icon with bag

Full guidance for the CJRS extension will be published on 10 November. The guidance for claim periods from February onwards will be published following the government’s review.

The CJRS (also known as the furlough scheme) will remain open until 31 March 2021. For claim periods running to January 2021, employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. The £2,500 cap is proportional to the hours not worked.

The government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.

Claims can be made by employers across the UK that meet the eligibility criteria.

This policy paper sets out updated details on:

  • eligibility criteria for employers and employees
  • what employers will need in order to claim
  • updated information on reference data to calculate those claims

Employers who can claim under the CJRS extension

Employers do not need to have used the CJRS previously.

Employers across the UK can claim, whether their businesses are open or closed 

The government expects that publicly funded organisations will not use the scheme, as has already been the case for CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted. All other previous CJRS eligibility requirements also apply to these employers.

HMRC will publish details of employers who make claims under the extended CJRS scheme, starting from December. Full details will be included in full guidance which will be published on 10 November 2020. Read more> 

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Self-Employment Income Support Scheme Grant Extension (SEISS)

In yet another change of policy the Government has announced the SEISS grant extension in the form of 2 further grants, each available for 3-month periods covering November 2020 to January 2021 and February 2021 to April 2021.MACO TPL business planning icon

To be eligible for the grant extension, self-employed individuals, including members of partnerships, must:

  • have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
  • declare that they intend to continue to trade and either:
  • are currently actively trading but are impacted by reduced demand due to coronavirus
  • were previously trading but are temporarily unable to do so due to coronavirus

The extension will last for 6 months, from November 2020 to April 2021. Grants will be paid in 2 lump sum instalments each covering a 3-month period.

The third grant will cover a 3-month period from 1 November 2020 until 31 January 2021. The Government will provide a taxable grant calculated at 80% of 3 months average monthly trading profits, paid out in a single instalment and capped at £7,500 in total. This is an increase from the previously announced amount of 55%.

The Government are providing the same level of support for the self-employed as is being provided for employees through the Coronavirus Job Retention Scheme which has also been extended until March 2021.

The Government has already announced that there will be a fourth grant covering February 2021 to April 2021. They will set out further details, including the level, of the fourth grant in due course.

The grants are taxable income and also subject to National Insurance contributions. Read more>

£134 million support announced to help UK businesses build back greener

The Government is to invest to keep UK’s greenest, most innovative businesses going during coronavirus pandemic.

This includes projects to service offshore wind turbines autonomously, using AI to reduce beer waste in the brewing process and converting seaweed into compostable packaging to tackle plastic waste are set to benefit.

read more> 

The Future Fund

This scheme will issue convertible loans between £125,000 to £5 million to innovative companies which are facing financing difficulties due to the coronavirus outbreak.19796 MACO FINANCIAL ACUITY NEWSLETTER WEB FILES 04

The Future Fund provides government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors.

These convertible loans may be an option for businesses that rely on equity investment and are unable to access other government business support programmes because they are either pre-revenue or pre-profit.

The scheme is open for applications until 31 January 2021.

A business is eligible if:

  • it is UK-incorporated - if your business is part of a corporate group, only the parent company is eligible
  • it has raised at least £250,000 in equity investment from third-party investors in the last 5 years
  • none of its shares are traded on a regulated market, multilateral trading facility or other listing venue
  • it was incorporated on or before 31 December 2019
  • at least one of the following is true:
  • half or more employees are UK-based
  • half or more revenues are from UK sales

read more>

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The Coronavirus Large Business Interruption Loan Scheme

The Coronavirus Large Business Interruption Loan Scheme (CLBILS) provides financial support to larger businesses affected by coronavirus (COVID-19).

The scheme helps medium and large sized businesses to access loans and other kinds of finance up to £200 million.

The government guarantees 80% of the finance to the lender and recently announced that the scheme will be extended and is open to applications until 31 January 2021.

read more>

Bounce Back Loans19796 MACO FINANCIAL ACUITY NEWSLETTER WEB FILES 15

The scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover.

The maximum loan available is £50,000. The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.

The scheme has been extended and is now open to applications until 31 January 2021.

read more>

Eat Out to Help Out Scheme

HMRC have issued guidance on information about the recovery of over claimed Eat Out to Help Out payments.

It also describes the penalties HMRC can charge.

An over claimed Eat Out to Help Out payment includes any amount of a payment which the business was not entitled to receive. read more>

Find out how to pay back all or some of the payments your business claimed when taking part in the Eat Out to Help Out Scheme.

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Kickstart Scheme employer resources

If you've been offered Kickstart Scheme funding, you can use these resources to show your support for the scheme. read more>

 

 

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