Posted on November 2, 2020  
by Noel Guilford

Just when you thought it was safe to go back in the water…..the Government announce another national lockdown. At the end of July I wrote that this would happen and what savvy businesses should do to prepare for a second spike! That advice was heeded by many and is just as relevant today because the fallout from this lockdown will be felt well into the new year.

And of course another lockdown also that means that the Coronavirus Job Retention Scheme which was due to come to an end on 31 October (also known as the Furlough Scheme) will be extended until 31 December, as follows:

  • The grant will revert to the August levels, with the Government covering the costs of 80% of the salary that employees do not work, up to a maximum of £2,500.
  • Employers will need to pay the National Insurance contributions and pension contributions that apply to the hours the employee is not working.
  • Businesses will be able to claim in advance of making payments to employees, although there will be a short period where that won’t be possible while the system is amended. Once that has been completed, claims can be made in advance of payments to employees, as previously.
  • Flexible furloughing, as well as full time furloughing of staff is possible.
  • Employees must have been included on an RTI submission to HMRC prior to midnight on the 30 October 2020 to qualify for the scheme. They can be on any type of contract. As before, the amended working arrangements must be agreed between employer and employer. Claims will need to be for a minimum period of seven days. Employers can top-up employee salary if they choose to do so.

The Job Support Scheme, originally due to start on the 1st November, will be suspended until the Furlough Scheme ends.

Fortunately this second lockdown won’t come as a surprise to many businesses that have been preparing for it and and have contingency plans – particularly with regard to cashflow – in place. Those that believed the Government when they said ‘It will all be over by Christmas’ won’t be so fortunate.

It will also sound the death knell for a large number of so-called ‘non-essential’ retailers, restaurants and bars for whom November and December are two of the busiest – and most profitable – months of the year.

It’s going to be a long cold winter: we are already helping a number of clients plan how they will survive the next six months. If we can help you too, please get in touch.

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Noel Guilford


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