The Government has extended the Coronavirus Job Retention Scheme (CJRS) following the announcement of new Coronavirus restrictions in England from Thursday 5 November 2020 to Wednesday 2 December 2020, which will require many businesses to close.
It has also confirmed that those businesses that are required to close will be eligible for business grants of up to £3,000 a month, introduced originally for closed businesses in areas of ‘Very High’ Coronavirus restrictions under the three-tier system.
Meanwhile, the mortgage payment holiday scheme that had been due to end on Saturday 31 October 2020 has been extended so that borrowers impacted by Coronavirus will be able to access a six-month repayment holiday.
The categories of businesses forced to close under the new restrictions are near-identical to those required to close following the initial announcement of ‘Stay at Home’ measures on 23 March 2020, with some limited differences.
The Government has confirmed that the following businesses will be required to close from Thursday 5 November to Wednesday 2 December 2020:
- all non-essential retail, including, but not limited to clothing and electronics stores, vehicle showrooms, travel agents, betting shops, auction houses, tailors, car washes, tobacco and vape shops.
- indoor and outdoor leisure facilities such as bowling alleys, leisure centres and gyms, sports facilities including swimming pools, golf courses and driving ranges, dance studios, stables and riding centres, soft play facilities, climbing walls and climbing centres, archery and shooting ranges, water and theme parks,
- entertainment venues such as theatres, concert halls, cinemas, museums and galleries, casinos, adult gaming centres and arcades, bingo halls, bowling alleys, concert halls, zoos and other animal attractions, botanical gardens;
- personal care facilities such as hair, beauty and nail salons, tattoo parlours, spas, massage parlours, body and skin piercing services, non-medical acupuncture, and tanning salons.
Supermarkets, food shops, garden centres and a limited group of other retailers that sell ‘essential’ goods and services will be able to remain open if they follow COVID-secure guidelines.
Meanwhile, ‘non-essential’ retailers will be able to open for click-and-collect and delivery only.
As was the case during the original ‘Stay at Home’ measures, hospitality businesses, including pubs, bars and restaurants that are required to close may provide takeaway and delivery services. However, in contrast to the previous measures, under the new restrictions, hospitality venues will not be able to provide takeaways of alcohol.
Accommodation venues will only be able to remain open for people who have to travel for work and for a limited number of other exemptions.
The Coronavirus Job Retention Scheme (CJRS) has been extended, just hours before it had been due to close to be replaced by the new Job Support Scheme.
The extended CJRS will operate on similar terms to those in place in August 2020. CJRS grants will cover 80 per cent of a furloughed employee’s usual wages, capped at £2,500 a month, while employers will be required to cover employer National Insurance and pension contributions. They will not be required to contribute to employees’ wages, as had been required in September and October.
Flexible furlough arrangements will also be permitted under the extended scheme. This means furloughed employees will be able to work reduced hours, paid by their employer in full, while the employer can claim a CJRS grant in respect of 80 per cent of the pay for usual hours not worked.
Crucially, neither the employer nor the employee needs to have used the CJRS previously to use the extended scheme. The scheme is open to all employees for whom a Real Time Information (RTI) submission had been made on or before 30 October 2020. Previously, the scheme had only been open for employees reported on an RTI submission on or before 19 March 2020 and who had been furloughed for at least three weeks before 1 July 2020.
The scheme will otherwise operate as it has done previously and will be open to employees on any type of contract. Employers will also be able to top-up employee wages above the value of CJRS grant if they wish to do so.
Employers will need to agree full furlough or flexible furlough arrangements with employees in accordance with employment law and their contracts of employment.
Full guidance on the extended scheme is expected to be published imminently.
The extension of the CJRS means that the introduction of the JSS Open and JSS Closed on 1 November has been postponed until the CJRS closes.
These arrangements apply to the whole of the UK.
Businesses that are required to close under the new England-wide restrictions and which are in the business rates system will be able to claim grants of between £667 and £1,500 for each two-week period they are required to remain closed.
The arrangements are the same as those in place for businesses in areas of ‘Very High’ (Tier Three) Coronavirus restrictions through the Local Restrictions Support Grant.
The new grants will pay £667, £1,000 or £1,500 for each two-week period a business is required to shut.
Businesses with rateable values of £15,000 or less will receive £667, those with rateable values of £15,000 to £51,000 will receive £1,000 and those with rateable values of more than £51,000 will receive £1,500.
The scheme will be administered by Local Authorities, with £1.1 billion of funding being distributed on the basis of £20 per head to help them support businesses more broadly.
This scheme applies to England only. However, the Devolved Administrations will receive equivalent funding to distribute as they see fit.
Following the introduction of the new Coronavirus restrictions in England, the Government has confirmed that mortgage payment holidays will still be available to borrowers impacted by Coronavirus. The scheme had been due to end on 31 October 2020.
Borrowers affected by Coronavirus will be entitled to a six-month mortgage payment holiday. Those that have already benefitted from a mortgage payment holiday will be able to top this up to six months without a record being made on their credit file.
Further details of the scheme are expected imminently.
Arrangements for Wales following lockdown announcement
Although England is entering a new national lockdown, arrangements in Wales differ due to its devolved decision-making powers. In Wales, the ongoing 17-day ‘firebreak’ will remain in place until 9 November 2020.
The Welsh Government has pledged that once the ‘firebreak’ ends, Wales will not return to a system of local lockdowns and many restrictions will be removed.
Businesses in Wales will, however, benefit from the extension of the Coronavirus Job Retention Scheme (CJRS), while the devolved government will be given funding to provide similar business grants to England using a pre-agreed formula.
Businesses in Wales also already benefit from the Lockdown Non-Domestic Grant and Lockdown Discretionary Grant. The details of these grants are as follows:
Lockdown Non-Domestic Rate Grant One
Businesses that are in the hospitality, leisure and the retail sector, who have had to close, can get a grant of £5,000. However, they must occupy properties with a rateable value between £12,001 and £51,000 to be eligible.
Lockdown Non-Domestic Rate Grant Two
Businesses that are eligible for Small Business Rates Relief (SBRR) in Wales, who occupy properties with a rateable value of up to £12,000, can get a grant of £1,000.
SBRR eligible businesses can also receive a further grant of £1,000 if they have suffered more than 50 per cent reduction in turnover (until 23 October) due to obliging with local restrictions.
SBRR eligible businesses can also receive a further grant of £2,000 from their local authority if they have had to close as a result of the firebreak lockdown.
However, businesses must be on the Non-Domestic Rates (NDR) rating list for their local authority, since 1 September 2020, and complete a registration form to take advantage of these Non-Domestic Rate Grants.
Businesses who receive the Lockdown Discretionary Grant from their local authority, cannot utilise these grants.
Lockdown Discretionary Grant One
If a business has had to close or can show that they will suffer at least an 80 per cent reduction in turnover, due to the firebreak lockdown, they can receive a discretionary grant of £1,500.
Lockdown Discretionary Grant Two
If a business has had to close or can show that they will suffer at least an 80 per cent reduction in turnover from the firebreak lockdown, they can receive a discretionary grant of £2,000. However, they must have already suffered more than 50 per cent reduction in turnover (until 23 October) due to obliging with local restrictions.
These grants are due to close on Friday 30 November 2020, or when the funds have reached their limit.
Businesses cannot apply for both options, one and two, for the Discretionary Grant.
Organisations are not eligible for the Lockdown Discretionary Grants if they meet the following criteria:
- They are eligible or receive the Lockdown Non-Domestic Rate Grants from their local authority.
- They have 50 or more employees.
- Their business generates less than 50 per cent of the applicant’s income.
More details on the Lockdown Business Fund can be found here.