English national lockdown – additional support for businesses

02 Nov 2020

Following the announcement of a new English national lockdown starting Thursday morning a package of additional support for businesses has been announced.

Job Retention Scheme (furlough)

Full details are not yet available but the broad thrust of the announcement is as follows:

  • The scheme is being extended across the UK “until December” – at this stage this appears to mean until the end of November but the precise end date has not been given

  • The amounts payable to employers under the scheme will revert to the levels in August – the Government will pay 80% of furloughed employees’ wages up to a cap of £2,500 per month, with employers bearing the cost of employers national insurance and compulsory pension contributions

  • Flexible furloughing will continue to be allowed along with full time furloughing – employers will need to pay employees as normal for any hours worked

  • In order to be eligible a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.

  • Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period

  • Neither the employer nor the employee needs to have previously used the furlough scheme in order to be eligible this time round

  • 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 eligibility requirements apply to these employers.

  • The introduction of the Job Support Scheme is delayed until the end of this new iteration of the furlough scheme

  • Further details on making claims will be issued shortly

Business Grants

Businesses required to close in England due to local or national restrictions will be eligible for the following:

  • For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks

  • For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks

  • For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks

In addition, £1.1bn 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

WR Partners comment

While clearly the extension of the furlough scheme is welcome news the timing of the announcement leaves employers with little time to respond and will inevitably lead to confusion. Many will already have made redundancy decisions based on the expectation the furlough scheme would end on Saturday and while this does not necessarily mean those redundant roles would now be secure the timing gives little or no chance to revisit the decisions.

While understandably the Government wishes to prevent employers from artificially enhancing claims by requiring an RTI submission to have been made by Friday for employees to qualify under the scheme there may be cases (though perhaps few) of employees who have been taken on in the period leading up to 30 October but for whom an RTI submission has not been made and who will now not be supported under the scheme.

The business grants available appear to be a little more generous than those previously announced (for all but businesses with properties with a rateable value of £15k or under) there has to be a question as to the extent this level of support is going to make a material difference to businesses forced to close for a full four week period.

Although not included in the original announcement the further extension of the SEISS for November is also welcome. However there continue to be large numbers of businesses to which the scheme provides no support, either because they commenced after 5 April 2019 or because they are operated through companies where the director/shareholder takes the majority of their reward through dividends. Now is surely the time to revisit these omissions?

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