With news of a second national lockdown for England, coming into force on 5th November 2020, the government has updated its package of financial support.
The Coronavirus Jobs Retention Scheme, commonly referred to as ‘furlough’, is extended for another month.
Businesses forced to close due to the lockdown measures can receive grants, and borrowers facing financial difficulties will be able to apply for another mortgage holiday.
The furlough scheme will allow employees to receive 80% of their salaries, up to a limit of £2,500 a month.
The replacement Jobs Support Scheme, offering less generous terms, was due to come into effect today and is now being deferred until the start of December.
All businesses, large and small, can apply for grants under the extended Jobs Retention Scheme.
It will be possible to bring furloughed employees back to work on a part-time basis, and employers will only have to cover the cost of their National Insurance and employer pension contributions.
For the average claim, employers will need to cover 5% of total employment costs.
Additional guidance on claiming furlough grants is expected shortly.
Businesses who have premises in England which was forced to close due to the lockdown measures can claim cash grants worth up to £3,000 a month.
The Local Restrictions Support Grant is calculated based on the rateable value of the closed business premises.
Central government is providing a further £1.1 billion in grant funding to local authorities, equivalent to £20 per head, so they can give wider business support.
For properties with a rateable value up to £15,000, the grants will be £1,334 a month, or £667 per two weeks.
The grants will be £2,000 a month, or £1,000 per two weeks, for businesses with a rateable property value between £15,000 and £51,000.
And for rateable values above £51,000, businesses can claim a grant under the Local Restrictions Support Grant of £3,000 a month, or £1,500 per two weeks.
Mortgage holidays, which were due to end on 31st October, will also be extended by six months for those borrowers facing financial hardship due to the Covid-19 pandemic.
Mortgage borrowers who have been impacted by the coronavirus and have not yet had a mortgage payment holiday will be entitled to a six-month holiday.
Those borrowers who have already started a mortgage payment holiday can top-up to six months, without this being recorded on their credit file.
The Financial Conduct Authority (FCA) is expected to publish further details shortly.
Announcing the extension to government financial support, Chancellor Rishi Sunak said:
Over the past eight months of this crisis we have helped millions of people to continue to provide for their families. But now – along with many other countries around the world – we face a tough winter ahead.
I have always said that we will do whatever it takes as the situation evolves. Now, as restrictions get tougher, we are taking steps to provide further financial support to protect jobs and businesses. These changes will provide a vital safety net for people across the UK.
