Government offers furlough scheme extension for UK lockdown

UK Prime Minister Boris Johnson announced in a press conference Saturday plans to extend the government’s furlough scheme throughout November and into December as he proposed a new national four-week lockdown from 5 November to 2 December. MPs in the UK Parliament’s House of Commons voted to implement the restrictions on Wednesday.

The lockdown replaces the local and regional tiered approach to restrictions to combat the coronavirus, which Johnson said the government intends to revert to after 2 December “according to the latest data and trends”.

Childcare, early years settings, schools, colleges, and universities will remain open during the four-week lockdown. “Essential” shops also remain open and click-and-collect services continue, but “nonessential shops, leisure and entertainment venues, and the personal care sector will all be closed”, Johnson told MPs on Monday. Hospitality businesses are also to close except for takeaway and delivery services.

The furlough scheme had previously been extended to 31 October, when it was due to close.

The Job Support Scheme, which was scheduled to start on 1 November, is postponed until the furlough scheme ends.

Support for employees

Under the extended furlough — or Coronavirus Job Retention Scheme — eligible employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month.

The scheme until 2 December has these additional elements:

• Businesses will have flexibility to use the scheme for employees for any amount of time and shift pattern, including furloughing them on a full-time basis.
• There is no employer contribution to wages for hours not worked. Employers will only need to cover National Insurance and employer pension contributions.
• Employers can claim either shortly before, during, or after running payroll. Claims can be made from next week and, as previously, paid within six working days.
• Employees employed as of 23 September (just before the Job Support Scheme was announced) and notified to HMRC by RTI (Real Time Information) on or before that date but have since been made redundant can be rehired and placed on the scheme.

Aid for self-employed

On 22 October the UK government announced an increase in grant support to self-employed workers from 20% to 40% of trading profits.

However, for November, to reflect changes to the furlough scheme, self-employed workers will receive 80% of their average trading profits.

As grants are calculated over three months, this increases the total level of the grant to 55% of trading profits for November to January, and the maximum grant will increase to £5,160, the government said.

In addition, the claims window is being brought forward from 14 December to 30 November to allow faster payments.

The government has set out further details.

Guaranteed loan schemes

The government also announced an extension of the deadlines for the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and Coronavirus Large Business Interruption Loan Scheme from 30 November to the end of January 2021.

Additionally, the Bounce Back Loan Scheme rules are being adjusted to allow businesses that have borrowed less than the maximum allowed, that is, less than 25% of their turnover, to top up their existing loan.

The government has also set out information on grants for local businesses forced to close as a result of the restrictions.

— Oliver Rowe (Oliver.Rowe@aicpa-cima.com) is an FM magazine senior editor.