November 5th saw England enter into a second national lockdown where non-essential businesses and those in the tourism and hospitality sectors, and others, have been ordered to close by the Government. Many businesses, particularly those that were in Tiers 2 and 3, will find it hard to survive and will require a broad range of business support to make it through the winter. What has the Government put in place?
We now know that the Coronavirus Job Retention Scheme (CJRS) will not end, as anticipated on 31 October, but will remain in place until December at the earliest. This means that the Government will pay businesses 80% of wages for those employees furloughed, up to a maximum of £2,500 per month. Employers will only need to make national insurance and employer pension contributions.
The government has also introduced a series of grants that businesses who are ordered to close will be able to receive and these are going to be split into rateable value (RV) bands: those businesses with an RV of £15,000 or under are eligible for £1,334 per month or £667 every two weeks; with an RV between £15,000 and £51,000, businesses are eligible for £2,000 per month or £1,000 every two weeks; with an RV over £51,000, businesses can receive £3,000 per month or £1,500 every two weeks.
And the Government has decided to give Local Authorities an additional £1.1bn (distributed on the basis of £20 per head of population in an area) that can be used by the local authority to provide further one-off support for business.
Finally, we now know that the 4 loans schemes that we put in place during the first national lockdown - Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS), the Bounce Back loan scheme, and the Future Fund – will now be available until 31 January 2021. As importantly, those businesses that secured Bounce Back loans will be able to top these up, although details on how to are still awaited.
It is clear that the need for a second lockdown has focused minds regarding much-needed business support arrangements. What will be important now is to ensure that businesses get this support quickly and simply. What we do not want to see are businesses desperately clinging to a cliff edge because support is not provided in time.