The second lockdown in the UK and help for businesses

The Prime Minister of the United Kingdom, Boris Johnson, introduced the so-called second lockdown from 5 November. Initially it was estimated that this renewed partial restriction of civil liberties would last until early December. Today, however, we know that the current lockdown may last into early 2021. The decision to reinstate restrictions was taken on the basis of warnings presented by scientists and virologists working with the British government. Coronavirus in the UK is spreading too quickly, so to avoid an astronomical rise in the number of deaths, a second lockdown was ordered.

But how does this decision affect business owners? Can you count on help in the UK? If so, what does the government support programme aimed at businesses look like? Let’s find out.

Business Coronavirus Support Finder - find out what kind of help you qualify for

In the midst of the pandemic, finding information on the government schemes being run and the kinds of restrictions in place can overwhelm anyone. Things will get even more complicated from 2 December, when the “tier system” is introduced. During this period, restrictions will apply at a regional level; each county or region will have its own individually set safety measures depending on the number of infections and deaths in the area. These changes will, of course, also affect business owners.

Fortunately, the UK government has decided to meet business owners halfway and help them find their bearings in this bureaucratic chaos. Whether your business is a Ltd company in England or you are self-employed in the UK, you will discover your options for getting help by using the Business Coronavirus Support Finder.

This is a tool on the gov.uk government website that asks you about the type of business you run, where it is located, the number of employees, and your annual turnover. You then have to state whether you take part in the PAYE (pay as you earn) tax system and whether you are self-employed. The system may also ask about the value of assets you own, such as property. One of the final questions concerns the nature of your business - whether it is a nightclub, dance hall, or an adults-only entertainment venue. At the very end, you will be asked whether the restrictions in force have obliged you to close or suspend your business.

Based on all this information, you will be shown a list of business support schemes you can use, along with information and links taking you directly to the pages of the offices where you can actually obtain that help. This is a huge convenience for company owners, who thanks to the Business Coronavirus Support Finder can identify what kind of support their particular business is entitled to, and get a picture of which applications and documents they need to submit, speeding up the bureaucratic process of getting funding in the UK.

Grants for businesses forced to close their premises

The start of the second lockdown and the tightened restrictions meant that some premises were forced to close for at least a month. These businesses can, however, count on receiving a grant of up to £3,000 (the Local Restrictions Support Grant). The eligibility conditions for this financial support are similar to those set out in the RHLGF scheme (the Retail, Hospitality and Leisure Grant Fund), which was introduced in the spring during the first lockdown in the United Kingdom.

The size of the grant for individual businesses was set at government level and divided into three bands:

• for properties with a rateable value of £15,000 or below, the grant is £1,334 per four weeks,

• for properties with a rateable value between £15,000 and £51,000, the grant is £2,000 per four weeks,

• for properties with a rateable value of £51,000 or above, the grant is £3,000 per four weeks.

Detailed requirements, application forms, and further information can be found on government websites. It is also worth following news portals and specialist services that report on ongoing changes to funding. The economic and epidemiological situation in the United Kingdom is exceptionally changeable, and the rules and criteria are being refined and corrected in real time. It is worth stressing, however, that help for those who need it most, that is, local businesses expected to be hit hardest by the second wave of the epidemic, is available and within reach - you just need to know how and where to ask for it.

CJRS - the job protection scheme

An extremely important element during the second lockdown in the UK is ensuring continuity of work and retaining staff through this difficult period for business owners. In response to the need to protect jobs, the CJRS (Coronavirus Job Retention Scheme) has been extended for the duration of the nationwide second lockdown, that is, until early December.

Under the rules of this scheme, employees will receive 80% of their current wages for the hours not worked because of the restrictions. The maximum value of this support, however, is £2,500. This means lower staff costs for the employer (at the same level as from August 2020), and support for employees working in the industries hit hardest by the lockdown.

The CJRS is open to large, medium-sized and small businesses, as well as non-profit organisations and charities. It is worth noting that it is up to the employer to decide how many hours a previously furloughed person will work on their return. Regardless of the number of hours worked, however, the only obligation on an employer taking part in the scheme is to cover pension contributions and National Insurance, which together amount to just around 5% of the costs an employer traditionally bears when employing and paying staff.

The delayed launch of the Job Support Scheme

Unfortunately there is no good news for those waiting for the launch of the Job Support Scheme, which was aimed at protecting jobs in businesses facing lower demand for their services/products over the winter months. The scheme was to include a VAT cut on a range of products and services in areas including tourism. Support was also to be provided to companies with deferred VAT payments in the UK.

The Job Support Scheme has been postponed until the CJRS, mentioned above, comes to an end. This means we can expect new information about this type of help for businesses in the United Kingdom in the near future. The scheme is planned to support UK business until the end of March 2021, although given the delay this date may change.

Summary

There are many forms of help for business owners in the United Kingdom during the second lockdown, which is certainly welcome news for those struggling to run a business in these difficult times. There is plenty of information about funding and its conditions, and it changes as quickly as the state of the fight against the pandemic. That is why it is worth following government websites and keeping up to date with the latest regulations and updates. Business owners, you are not alone - reach for the help dedicated to your business.