As 2021 begins, businesses across the UK will be bracing themselves for a difficult start to the year, with coronavirus restrictions causing continued economic disruption.
Fortunately, support will be available over the next few months at least, following Chancellor Rishi Sunak’s decision to extend the coronavirus job retention scheme (CJRS) until the end of April, as well as moving the deadline for Government-backed loan schemes to the end of March.
The Chancellor said he wanted to give businesses “certainty and clarity” by extending support, enabling businesses to plan ahead for the next few months “regardless of the path the virus takes”.
The CJRS was due to finish on 31 March, with employer contributions set for review in January, but the Chancellor confirmed a one-month extension to take the scheme’s current offering up to 30 April 2021.
This means the Government will keep paying 80% of employees’ salary for hours not worked, up to a maximum of £2,500 a month. Employers are still required to pay National Insurance contributions and pensions for those hours.
It will continue with the same eligibility criteria: employees must have been on your PAYE payroll on 30 October 2020, and you must have made a PAYE real time information submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings.
You don’t need to have furloughed employees before to claim under CJRS, and your employees can be on any type of contract.
Three different Government-backed loan schemes were originally due to close at the end of January, but their deadline has been moved to 31 March 2021 instead.
- Bounce-back loans, which provide up to £50,000 interest-free for a year, with no repayments required during that period.
- The coronavirus business interruption loan scheme, offering loans of up to £5 million to UK-based SMEs with an annual turnover of up to £45 million.
- The coronavirus large business interruption loan scheme, for firms with a turnover of £250 million or more.
The Government says more support will be available after March, in the form of a “successor loan scheme”.
The details of this scheme and other COVID-19 support will be delivered in the Budget, which is set to take place on 3 March 2021.
For businesses currently struggling under the most severe restrictions, however, that might be a little too late.
The decision to extend furlough and loan schemes was announced shortly before new tier 4 rules were brought in across various parts of England, forcing all non-essential retailers to close.
Various business groups are now urging the Government to announce further support for those areas, with some calling for an extension to business rates relief.
Matthew Fell, chief UK policy director at the Confederation of British Industry, said the restrictions were a “real kick in the teeth for many businesses”, and said the Government should take a “fresh look” at support.
Helen Dickinson, chief executive of the British Retail Consortium, said:
“The Government will need to offer additional financial support to help these businesses get back on an even keel – an extension to business rates relief in 2021 is the best place to start.”
For the self-employed, more information could also be due on the fourth self-employed income support scheme grant. This is set to cover the period from February 2021 to April 2021, but itslevel has yet to be announced.
The Government has said it will announce further details “in due course”.
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