It is almost certain as a reader of this blog you will have made some further changes to your daily routine as we head into our second national lock-down which is scheduled to end 2nd December – although this may be extended dependent on the situation at the time. Pubs, restaurants, gyms, non-essential shops and places of worship will close, but schools, colleges and universities remain open. The Government has again reacted to tighter restrictions being introduced by increasing financial support. We’ve highlighted some of the key changes below.
The furlough scheme was due to end on 31st October but this has now been extended to 31st March and the rate of pay has increased back up to 80% for the month of November meaning the extended scheme is more generous for employers than it was in October. The policy will be reviewed again by the Government in January and AJN will continue to update you. A key change to the revised scheme includes re-hiring of anyone made redundant after 23rd September 2020 and placed on furlough. To find out more on how this interacts with the Job Support Scheme (JSS) please read our blog here.
Self Employed support
To reflect the recent changes to the furlough scheme, the third instalment of the UK-wide self employment income support scheme (SEISS) will be made more generous – with self employed individuals receiving 80% of their average trading profits for November. In addition the claims window is being brought forward from 14 December to 30 November. The maximum grant will increase to £5,160. To be eligible for the grant extension self employed individuals, including members of partnerships, must have been previously eligible for the SEISS first and second grant (although they do not have to have claimed the previous grants). They must declare that they intend to continue to trade, but have either been actively trading but impacted by reduced demand due to coronavirus, or were previously trading but are temporarily unable to do so due to coronavirus. The changes are welcome and follow the changes to the furlough scheme above
Interest Rate Freeze
The Bank of England has confirmed interest rates will be held at 0.1% as it announced a further £150bn of support to the economy.
Local Restriction Support Grant
Any business premises that are forced to close will be entitled to receive grants between £1,334 and £3,000 per month.
Mortgage holidays are also being extended for 6 months. Those who have had their payments deferred already, can extend their mortgage holiday until they reach the six-month limit. The FCA advise people to speak to lenders for a tailored support plan if the 6 month holiday limit has been reached. Further details on this are expected tomorrow.
Bounce Back Loan Scheme (BBLS) Extended
The BBLS has been extended to 31st January 2021 and businesses can get a top-up on their loans. Some key aspects of the scheme have also changed and further details can found on our blog here
The government has provided an estimated £1.8bn bailout of TFL to ensure it can operate till March 2021. This has saved the network from potential insolvency. The amendments that were in place to the Congestion charge, namely longer operating hours and a 30% increase in the charge, remain in place.
Since the start of government support schemes for covid we’ve learnt a lot by listening, analysing and acting! Some tips are highlighted below.
- Ensure you are aware of what schemes are applicable to you as a business as applications need to be made to avail them. Speak to your accountant if you are unsure
- Devise a cash flow forecast of your business for the next 12 months – this can be a critical tool. AJN can provide all businesses with a free template to get you going – contact us for one
- Review expenditure in detail – where income has reduced due to the impact of coronavirus, now is the perfect time to re-evaluate expenditure and look to cut costs where possible
- Ensure you have business metrics at your fingertips – the best way to do this is through the use of cloud accounting software. If you aren’t already using this, then now really is the time to make this switch – there are ways to get this for free – contact us to find out more
- Defer tax payments where possible. Contact HMRC to arrange time to pay arrangements – contact HMRC here
- If you are VAT registered then ensure you are using the cash basis rather than invoice basis to account for VAT – this ensures you only pay VAT on sales invoices once money has been received rather than when the invoice was raised. Speak to your accountant to help you
Please feel free to contact us if you want to discuss any of the above and most importantly, stay safe!