Since the Prime Minister’s announcements on Monday, The Chancellor, yesterday, released the latest government updates. This detailed how they will be supporting businesses and the self employed, during the lockdown and over the next 6 months.
So what’s changed? The Furlough Scheme has been extended for 6 months, lasting until March 2021. The government will continue to help pay people’s wages, up to 80% of the normal amount.
Employers small or large, charitable or non-profit, are eligible for the extended Job Retention Scheme, which will now continue until March 2021. Businesses will have the flexibility to bring furloughed workers back to work on a part time basis or furlough them full time. Employers will need to cover the costs of employer National Insurance and employer pension contributions.
The government will review the policy in January. They will then decide whether economic circumstances are improving enough to ask employers to contribute more.
As the furlough scheme itself is now being extended to the end of March. The original purpose of the Job Retention Bonus was to incentivise employers to keep people in work until the end of January. This now obviously falls away. Instead, the government will redeploy a retention incentive at the appropriate time.
For self-employed people, the government has confirmed the next income support grant. This covers the period November to January and will now increase to 80% of average profits, up to £7,500.
The grant extension is for individuals who are currently eligible for the self employment Income Support Scheme and are actively continuing to trade but are facing a reduced demand due to Coronavirus (Covid-19).
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. This is 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. They have already announced that there will be a fourth grant covering February 2021 to April 2021. The Government 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.
Also, in the latest government updates, The Chancellor also announced this week that there are cash grants of up to £3,000 per month for businesses which are closed. There is a chance to top-up Bounce Back Loans, longer to apply for our loan schemes and the Future Fund. There will also be an extension to the mortgage payment holidays.