On Saturday 31^st of October Boris Johnson announced that England would go into a national lockdown from Thursday 5 November 2020 to Wednesday 2 December 2020. As a result, the Coronavirus Job Retention Scheme has been extended and improved and the new Job Support Scheme has been temporarily put on hold.

The key headlines of the most recent government financial support measures announced on 31^st October are listed below. Please remember that you will find information on other available support in our news article – Winter Economy Plan – government improves financial support will you benefit?

Extended Coronavirus Job Retention Scheme (CRJS)

• It was previously announced that the Coronavirus Job Retention Scheme was being extended until 2 December 2020.
• It has now been confirmed that the Scheme will be extended to the end of March 2021 for all parts of the United Kingdom.
• It will be reviewed in January 2021 to determine whether the economic circumstances are improving enough to ask employers to contribute more.
• Eligible employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month.
• Businesses will have flexibility to use the scheme for employees for any amount of time and shift pattern, including furloughing them full-time.
• There will be no employer contribution to wages for hours not worked.
• Employers will only be asked to cover National Insurance and Employer pension contributions for hours not worked.
• The extended Coronavirus Job Retention Scheme will operate as the previous Scheme did, with businesses being able to claim either shortly before, during or after running payroll. Claims can be made from 8am on Wednesday 11 November 2020. Claims made for November must be submitted to HMRC by no-later than 14 December 2020.
• Claims relating to each subsequent month should be submitted by day 14 of the following month.
• Neither the employer nor the employee needs to have previously claimed or have been claimed for under the Scheme to make a claim under the extended Coronavirus Job Retention Scheme (if other eligibility criteria are met).
• An employer can claim for employees who were employed and on their PAYE payroll on 30 October 2020. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
• Employees that were employed and on the payroll on 23 September 2020 (the day before the Job Support Scheme announcement) who were made redundant or stopped working afterwards can be re-employed and claimed for. The employer must have made an RTI submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.

Job Support Scheme

• The previously announced Job Support Scheme which was intended to replace the Coronavirus Jon Retention Scheme has been suspended.

Job Retention Bonus

• The Job Retention Bonus, previously announced, will not be paid in February 2021.
• The purpose of the Job Retention Bonus was to encourage employers to keep people in work until the end of January 2021. However, the extended Coronavirus Job Retention Scheme effectively does this.

Mortgage Payment Holidays

• Mortgage payment holidays will no longer end at the end of October as originally intended.
• Borrowers who have not yet had a payment deferral will be eligible for 2 payment deferrals of up to 6 months in total.
• Borrowers who currently have an initial payment deferral, will be eligible for another payment deferral of up to 3 months.
• Borrowers who have resumed repayments after an initial payment deferral will be eligible for another payment deferral of up to 3 months.
• Borrowers have until 31 January 2021 to request a payment deferral.

Business Grants

Businesses required to close in England due to local or national restrictions will be eligible for the following:

• For properties with a rateable value of £15,000 or under, grants to be £1,334 per month, or £667 per two weeks.
• For properties with a rateable value of between £15,000 and £51,000 grants to be £2,000 per month, or £1,000 per two weeks.
• For properties with a rateable value of £51,000 or over grants to be £3,000 per month, or £1,500 per two weeks.

SEISS Grant Extension

• The Government recently announced an extension of the Self-Employment Income Support Scheme from 40% to 80% of trading profits for November 2020, which increased the overall level of the grant to 55% of trading profits.
• This latest announcement sees the grant increase to 80% of trading profits covering November 2020 to January 2021.
• It is calculated based on 80% of 3 months’ average trading profits, paid out in a single instalment and capped at £7,500.
• HMRC will pay this grant sooner than planned with the window opening on 30 November 2020.
• There will also be a fourth SEISS grant covering February 2021 to April 2021. The actual details to be confirmed later.

Extension of access to finance schemes

The government is extending new applications for the following four business loan schemes to 31 January 2021:

• Coronavirus Bounce Back Loan Scheme
• Coronavirus Business Interruption Loan Scheme
• Coronavirus Large Business Interruption Loan Scheme
• Future Fund

For individuals who already have a Coronavirus Bounce Back Loan but didn't take out the maximum amount available, they can now top that up to the £50,000 limit.

Pay as you Grow

• The government will give all businesses that borrowed under the Coronavirus Bounce Back Loan Scheme the option to repay their loan over a period of up to ten years.
• This will reduce their average monthly repayments on the loan by almost half.
• UK businesses will also have the option to move temporarily to interest-only payments for periods of up to six months (an option which they can use up to three times), or to pause their repayments entirely for up to six months (an option they can use once and only after having made six payments).

Mortgage and Consumer Credit Payment Holidays (current proposal from FCA)

• Mortgage payment holidays will no longer end at the end of October 2020 as originally intended.
• Borrowers who have not yet had a payment deferral will be eligible for 2 payment deferrals of up to 6 months in total.
• Borrowers who currently have an initial payment deferral, will be eligible for another payment deferral of up to 3 months.
• Borrowers who have resumed repayments after an initial payment deferral will be eligible for another payment deferral of up to 3 months.
• Borrowers have until 31 January 2021 to request a payment deferral.
• Payment holidays will also continue to be available for consumer credit products such as personal loans and car finance.
• As with mortgages, borrowers impacted by coronavirus who have not yet taken a payment holiday on that product can ask for one of up to 6 months and those that currently have a payment holiday will be eligible to top up to six months without this being recorded on their credit file.

VAT deferral “New Payment Scheme”

• If you’re a UK VAT registered business and had a VAT payment due between 20 March 2020 and 30 June 2020, you had the option to:
  • defer the payment until a later date
  • pay the VAT due as normal
• Over half a million businesses deferred VAT payments
• The government will now these give businesses the option to spread their payments over the financial year 2021-2022.
• Rather than paying in full at the end of March 2021, businesses will be able to choose to make 11 equal instalments over 2021-22.

Enhanced Time to Pay for Self-Assessment taxpayers

• If you were due to pay a self-assessment payment on account by 31 July 2020, then you were able to defer payment until January 2021.
• The government will now give the self-employed and other taxpayers more time to pay taxes due in January 2021.
• Taxpayers with up to £30,000 of Self-Assessment liabilities due will be able to use HMRC’s self-service Time to Pay facility to secure a plan to pay over an additional 12 months.
• This means that Self-Assessment liabilities due in July 2020 will not need to be paid in full until January 2022.

Burcu Kaya, Financial Adviser in Enfield Town, North London, Hertfordshire said: 

‘Many people will be delighted that the chancellor has extended the Coronavirus Job Retention Scheme during the latest national lockdown. For anyone who is struggling to pay their mortgage and hasn’t already claimed the six-month mortgage payment holiday will be really welcomed. Also, the business grant package should help support businesses during the lockdown. Further details of the Self-employment Income Support Scheme are due soon and our financial advisers will provide details as soon as they are available. If there are any further changes to the Winter Economy Plan, we will keep you updated but if you want to understand how you and your family will be affected by the current changes please call our Thomas Oliver financial advisers now on 01707 872000.’  

Burcu Kaya, Financial Adviser in North London, Essex and Hertfordshire continued:

‘Our mortgage broking team and financial advisers will still be available to speak to clients and conduct online meetings during the new lockdown. If you need mortgage advice or want to speak to a local financial adviser, please call Thomas Oliver on 01707 872000. We offer a free initial mortgage or financial advice consultation.  We appreciate that the rules are changing frequently. If you want to review the guidelines since March 2020 please read - Winter Economy Plan – government improves financial support will you benefit?’

In Summary…

If you have any questions about the latest government changes, please call our Thomas Oliver financial planning team on 01707 872000.

Your property may be repossessed if you do not keep up repayments on your mortgage.