Lockdown support: November update

In the latest of several announcements about coronavirus-related business support, the furlough scheme has been extended to the end of March 2021, and the level of the next self-employed grant has been increased.

Those updates have been received with mixed reactions by businesses across the UK.

On one hand, with England entering a new national lockdown, Wales only just emerging from its ‘fire-break’ rules, and restrictions continuing in Scotland and Northern Ireland, many businesses are in need of extra support.

On the other hand, the change may have come a little too late for some, after September saw record levels of redundancies as employers anticipated the end of the furlough scheme on 31 October.

According to the Office for National Statistics, 181,000 people were made redundant from July to September 2020, taking redundancy levels to a new high of 314,000 – and exceeding the spike of 311,000 recorded at the start of 2009.

If your business needs to furlough staff over the next few months, or if you’re self-employed and have been negatively impacted by COVID-19, here’s what you need to know.

Furlough extension

Initially, the coronavirus job retention scheme (CJRS) – otherwise known as the furlough scheme – was due to be replaced by a new job support scheme.

This was intended to offer a ‘safety net’ of support to businesses that could keep their staff on part-time, as well as those that had been forced to close under regional lockdowns.

Following the announcement of national restrictions across England, however, the CJRS was extended for an additional month – then, on 5 November, it was further extended to 31 March 2021.

This is available to employers everywhere in the UK, whether their businesses are open or closed, and they do not need to have used the CJRS previously.

For the period running from 1 November 2020 to 31 January 2021, employers can claim 80% of employees’ usual salary for hours not worked, up to a maximum of £2,500 per month.

Currently, employers are not required to contribute to employee wages for hours not worked, but must cover employers’ National Insurance and workplace pension contributions.

The Government said this amounts to 5% of total employment costs per employee per month.

The extended scheme will be reviewed in January, however, and employers may be asked to increase their contributions if economic conditions in the UK are improving enough.

More support for the self-employed

In addition to extending support for employers, the Government announced an increase to the third round of taxable grants available through the self-employed income support scheme (SEISS).

This had previously been set at 55% of average profits for the period from 1 November 2020 until 31 January 2021,  but has been increased to 80% of average profits up to a maximum of £7,500.

Another grant will then be available to cover the period from February 2021 to April 2021, although further details have yet to be released.

Derek Cribb, chief executive at the Association of Independent Professionals and the Self-Employed, said it was “absolutely right” to extend SEISS, but urged the Government to support those who have been left out of existing support measures, such as the newly self-employed and limited company directors.

Cribb said:

“The Government has provided admirably robust support for many employees and self-employed people, but at every turn it continues to ignore large groups of the self-employed who have been financially devastated in the last six months.

“We thank the Government for its support, but must press on it the urgent need for a targeted approach to help these forgotten groups.”

Get in touch to discuss COVID-19 support.