Coronavirus Business Support Explained

Amid growing pressure, Chancellor Rishi Sunak, has unveiled increased support for jobs and workers impacted by tightened Covid restrictions.  The revised support builds upon the existing packages he set out earlier this month.

The funding is available UK-wide despite the approach to restrictions varying across the devolved nations.

To help make sense of what funding support is available to you and your business, here is our guide to the support that is on offer.

Funding Support specific to Tier 3

With the tightest restrictions, tier 3 bans people from meeting indoors, in any hospitality venue or private gardens. Pubs not serving food, betting shops and soft play centres are among businesses being forced to close.

How will the Job Support Scheme (JSS) work in Tier 3?

  • Workers will receive 67% of their wages and this will be funded by the government
  • Businesses must be closed for a minimum of 7 days to qualify for the scheme
  • Employers have to continue to pay NI and minimum pension contributions

What grants are available to businesses in Tier 3?

Businesses in tier 3 will qualify for a grant of up to £3,000 per month if they are impacted by the restrictions, whether they are open or closed.

Funding Support specific to Tiers 2 and 3

Businesses within the hospitality, accommodation and leisure industries will be eligible to a backdated grant of up to £2,100 per month in addition to any other funding received.

Funding support available to businesses nationally

Businesses who are experiencing lower demand to normal due to Covid restrictions are able to access various other support packages.

How will the part time Job Support Scheme work?

Businesses that are able to open but only have enough work for employees to return on a part-time basis can get help under the JSS.

  • Workers will be paid at least 73% of their wages
  • Workers have to work a minimum of 20% of their usual hours and these hours will be paid in full by the employer.
  • The employer must pay at least an additional 4% of wages
  • The government will pay 49% of the wages, up to £1,541.75 per month
  • Workers have to have been on the payroll since 23 September 2020
  • Workers can be brought on and off the scheme and work varied hours.
  • Each working arrangement must cover at least 7 days

What extra help is available to businesses?

Boasting one of the most comprehensive coronavirus financial support packages in the world, there are several other schemes businesses throughout the UK can benefit from.

Grants and Loans

To enable even more businesses to benefit from the government’s coronavirus loan schemes, applications for all of these have been extended until the end of November. This includes the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Scheme and the Future Fund.

 

  • Self-Employed Income Support Scheme (SEISS)

To continue to provide critical support to the self-employed the government has extended the self-employed income support scheme.

SEISS Highlights

    • Grants will be paid in two lump sum instalments
    • The first instalment 1st November 2020 – 31 January 2021 will provide a taxable grant covering 40% of average monthly trading profits, capped at £3,750 in total.
    • The grant for the second instalment 1st February 2021 – 30 April 2021 is yet to be announced.
    • Claimants must declare that they intend to trade regardless to whether they are able to trade currently.

 

  • The Bounce Back Loan Scheme (BBLS)

As the name suggests, this scheme aims to support businesses with their cashflow in the immediate future. Straightforward to apply for, as of 20 September the scheme had approved 81 per cent of loan applications.

BBLS Highlights

    • No repayments for the first 12 months
    • All fees covered by the government
    • No interest payable for the first 12 months
    • Maximum borrowing of £50,000 (up to 25 per cent of a business’ turnover)
    • No need for personal guarantees
    • BBLS is available to any UK based business that was in operation prior to 1 March 2020 and has been adversely impacted by COVID-19. Once approved, the cash will be available in days.

 

  • The Coronavirus Business Support Scheme (CBILS)

Businesses can apply for up to £5million through this scheme and it covers different types of finance including business loans, overdrafts, invoice finance and asset finance.

CBILS Highlights

    • No repayments for the first 12 months
    • All fees covered by the government
    • No interest payable for the first 12 months
    • Maximum borrowing of £5million (up to 25% of turnover)
    • Multiple loans of up to £250K can be taken from different providers with no need for personal guarantees
    • With a more rigorous approval process, the eligibility criteria for this scheme is more stringent than BBLS. Available to UK based business, with a group turnover of no more than £45million, they must have experienced a loss in trading or an impact on business performance as a consequence of COVID-19. An additional stipulation is that they must have been able to afford the lending prior to the pandemic.

Tax Deferrals

Businesses who deferred their VAT bills between March and June 2020 can now make 11 smaller interest-free payments during the 2021-2022 financial year instead of paying a lump sum in full at the end of March 2021.

Additionally, self-assessment taxpayers can benefit from a separate additional 12-month extension from HMRC. Payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.

Bonuses

In the Chancellor’s summer economic update, the Coronavirus Job Retention Bonus was announced. Businesses will receive £1,000 for every furloughed employer kept on until at least the end of January.

The government will also give businesses £1,500 for every out of work 16-24 year given a high-quality six-month work placement.

For businesses investing in apprentices the government has pledged to give £2,000 for every under-25 apprentice taken on and £1,500 for every over-25 apprentice taken on.

Support from the Fabulous Group

Whilst we appreciate there is a lot to digest here, It’s extremely important that should you wish to access funding you don’t delay. Should you wish to gain clarity on anything covered within this article, please do get in touch. We can run through the options available to you and help you with how to proceed with any applications. To contact us via email please send your query to hello@fabgroupco.com, alternatively give us a call on 0800 112 0880 and we will be happy to chat.


Published: 20th November 2020

All information stated is correct at time of publishing.