HERE WE CLOSE AGAIN...
ROSIE MURRAY-WEST ASKS THE EXPERTS HOW BUSINESSES CAN BEST COPE WITH A SECOND LOCKDOWN...
LOCKDOWN two is looming, and for the businesses forced to close their doors tomorrow having only been open again since July, it is a bitter blow. Mike Cherry, national chairman of the Federation of Small Businesses, says that many small firms are facing ‘the bleakest winter they have ever seen’, and is calling for a second wave support package featuring grants and loans to ensure that businesses get through it.
‘It is more important than ever to support small businesses and the selfemployed through this so they are still there to provide jobs and growth out the other side,’ he says.
Chancellor Rishi Sunak has already announced some of the details of schemes to support companies through a second lockdown that many experts fear may last far longer than four weeks, although there is likely to be more guidance on what will be available later.
While moving online and pivoting to offer takeaway or click and collect services will help some business owners flourish, experts acknowledge that the lockdown will be hard on many, both financially and mentally. ‘There will be hard days,’ acknowledges Ruth Cooper-Dickson, positive Psychology consultant, coach and founder of Champs (champsconsult.com). ‘It will be tough and running your own business can be hugely lonely.’
As business owners and self-employed entrepreneurs across the country gird their loins for a second round of restrictions, here’s our guide to the help that is available to get you through the next few weeks and months.
Extended furlough
Instead of the less generous Job Support Scheme, which was due to come in on November 1, the Government is continuing with the furlough scheme until at least November 30.
Although not all of the details of how the scheme will work have yet been announced, employees who
are furloughed will receive 80 per cent of their current salary, which is more than they were receiving in October, up to a cap of £2,500. Employees can be furloughed on a full or part-time basis and employers will have to contribute national insurance and pension contributions, but only for the hours when an employee does not work.
There will be more guidance, and an updated claims process, set out by the Government shortly.
Cheryl Sharp, director of accountancy group Pink Pig Financial, says the extended furlough is ‘looking pretty good now it will help more employees’ rather than just those that were furloughed in the past.
‘All employees that were on payroll as of October 30, and submitted on an RTI submission filed before 23.59pm on October 30 will be eligible. So, many many more employees than before – which will be a relief to employers, I’m sure,’ she says.
New Grants
If your business is forced to close, you will be eligible for further local authority grants, which will depend on the business rates you pay. For properties with a rateable value of £15,000 or less, grants will be £1,334 per month, or £667 per two weeks. For properties with a rateable value of between £15,000-£51,000, grants will be £2,000 per month, or £1,000 per two weeks, while for those properties with a rateable value of £51,000 or more grants will be £3,000 per month, or £1,500 per two weeks.
These are paid directly by the local authority, and there will be more detail on how at the gov.uk website over the next few days.
Extended Bounce Back and Business Interruption loans
The Government has extended the deadline to apply for these loans, which are interest-free for the first year, from the end of November until the end of January. The extension also applies to the Future Fund, aimed at UK start-ups. The Coronavirus Business Interruption Loans Scheme (CBILS) provides loans of between £50,000 and £5million. Medium-sized businesses with a turnover of more than £45million can apply for a CBILS loan directly from one of over 60 lenders or use a business loans broker.
The Bounce Back Loans Scheme (BBLS) offers between £2,000 and £30,000, repayable over six years. For the first year, the loans are interest-free as interest is covered by the Government. Loans were initially repayable over six years and this has now been extended to ten. As well as allowing new applicants to take out loans, businesses with existing Bounce Back or CBILS loans will be able to top theirs up – which has not previously been allowed – even if they borrowed below the maximum amount available based on their turnover. Stephen Pegge, managing director of Commercial Finance at UK Finance, the trade body for the industry, confirmed this.
‘We now look forward to working with the Treasury and British Business Bank to finalise the details of these changes over the coming week,’ he said.
More information is available on how to get these loans from the Government-backed British Business Bank at british-business-bank.co.uk, or you can approach your existing bank directly.
Increased SEISS
The grant for self-employed people affected by coronavirus, known as the SEISS, has also been slightly increased. The next grant, covering November, December and January, was meant to cover 40 per cent of trading profits for self-employed people for each month.
It will now cover 80 per cent of profits for November only and 40 per cent for the other two months, with the maximum grant £5,160.
A second grant will be paid until April but the level of this has not yet been set.
However, only self-employed workers eligible for the previous SEISS grants will be able to make a claim, meaning that many freelancers remain ineligible for any help because they had trading profits of more than £50,000 in the past, are directors of limited companies or have been paid through a combination of PAYE and self-employment.
The online service for the next grant will be available from November 30.
Other measures
For those who are not able to receive help from any of these sources, there are a number of other support measures being put in place, including an extension to mortgage holidays and the ability to defer tax payments.