What does the second lockdown mean for your business?

December 4, 2020 / News & General

Following announcements from the Prime Minister, as of Thursday 5th November, England officially heads into another lockdown for 4 weeks.

Naturally, many people are worried or concerned about what this will mean for their business. After all, it certainly isn’t business as usual, and many are struggling during this unprecedented time.

To help, Clarke Bell has put together this guide on what England’s second lockdown means for your business and what support is open to you, to help make a tricky time a little easier.

What are the new National restrictions?

Due to the number of COVID-19 cases continuing to rise rapidly, the government has announced a second lockdown in England.

Under new lockdown rules, residents can only leave their homes for specific reasons, including:

  • Work or volunteering: you can leave home for work or volunteering in a charitable service and can’t do either of these things from home.
  • Essential activities: you can only head out to shop for essentials, like food or medicine, to collect food or drink ordered through a click-and-collect service, or access critical public services
  • Fulfilling legal obligations: such as buying a house
  • Education or childcare: you can leave home to go to school or take your children to school, attend training or take your child to childcare that allows you to work.
  • Events: you can only leave home to attend a place of worship for individual prayer, attend a funeral or wedding as long as they meet regulations.

That is how the new lockdown will impact everybody’s day to day lives, so how will it affect businesses?

After all, this has wide-reaching impact on almost all businesses, many of whom have been ordered to close or change the way they provide their goods and services by the government  in order to reduce social contact.

Under new regulations:

  • All non-essential retail must close. Unless you are selling essentials such as food or medicine, you must shut. You can carry out a click-and-collect service and offer delivery.
  • All hospitality venues must close: including cafes, restaurants, pubs and bars. Again, these businesses can continue to operate a click-and-collect or delivery service.
  • Accommodation providers must close: including hotels, hostels, campsites and guest houses.
  • Leisure and sports facilities must shut: such as gyms and swimming pools and sports clubs.
  • Entertainment venues must close: including museums and galleries, cinemas, zoos and tourist attractions.
  • All personal care and beauty facilities must shut.

Clearly, the second English lockdown will have a huge impact on businesses small and large. Whether you have had to close completely, or are operating a heavily reduced service to adhere to new restrictions, next we will look at what support is open to you to help weather the storm.

Self-employed Income Support Scheme extended

Following the announcement of the second lockdown, Chancellor Rishi Sunak announced that he would be doubling the Self-Employed Income Support Scheme back to 80% for November.

This means that self-employed workers will receive a grant worth 80% of their average trading profits.

To help businesses get the support they need as soon as possible, payments will also be made quicker this time. On top of this, for the months of December and January, the self-employed will be offered 40% of trading profits, with the maximum a business can receive over the 3 months standing at £5,160.

This is welcomed news for many, however, the stark reality is that there are still many self-employed that are excluded from the scheme as they do not meet the correct requirements.

If this is true for you, the government has now promised to look into reinstating the Minimum Income Floor for self-employed people on Universal Credit. This would give the newly self-employed support that would be the equivalent to a full-time, minimum wage salary.

Am I eligible for the Self-Employed Income Support Scheme extension?

If you were eligible for the first and second grants, even if you did not apply for them, you will be eligible for the extended scheme.

You must also:

  • Declare that you intend to continue trading
  • Be actively trading but have been impacted by reduced demand due to the virus
  • Were previously trading but are temporarily unable to do so

Government Bounce Back Loan Scheme extended 

As well as the extension to the self-employed income support scheme, the government has announced that more businesses will be able to gain access to further support and have extended applications for government-backed loan schemes until the 31st January 2021.

Applications for the Bounce Back Loan Scheme, Coronavirus Interruption Loan Scheme and Coronavirus Large Business Interruption Loan Scheme have all been extended until the beginning of next year.

Likewise, small-medium businesses that have borrowed less than the maximum 25% of their turnover up to £50,000 under the Bounce Back Loan Scheme will be able to apply for a top-up to their current loan under the new rules.

Under the scheme, businesses can borrow between £2000 or up to 25% of their turnover, with a maximum loan of £50,000.

No repayments have to be made in the first year and the government has guaranteed 0% interest rates for the first 12 months, followed by rates of 2.5% a year after this.

Amidst criticism that banks had been blocking access to the Bounce Back Loan Scheme nearing its original deadline, there have now also been calls for more lenders to open up to new customers so more businesses can access the scheme.

Furlough Scheme Extended

If your business has employees, or you are an employee of your own limited company, more welcomed news is that the Coronavirus Job Retention Scheme has been extended for a month. This gives employees 80% of their current salary for hours not worked, up to a maximum of £2,500.

The cost to employers of retaining workers will also be reduced compared to the previous furlough scheme as they will only be asked to cover National Insurance and employer pension contributions which amount to around 5% of total employment costs. Businesses also have the flexibility to bring back employees on a part-time basis or furlough them full time.

Other business grants

Finally, businesses required to shut their doors altogether will be eligible for further support:

  • Properties with a rateable value of £15K or under will be eligible for a grant of £1,334
  • Properties with a rateable value of between £15-£51K will be eligible for a grant of £2,000 per month
  • Properties with a rateable value of £51K or more will be eligible for £3,000 per month

If your business is struggling, Clarke Bell are here to help

Despite the extra levels of help and support laid out by the government for the second lockdown, many businesses won’t survive these extremely challenging times.

If this is true for your business, the next step is to consider liquidation.

If you want to find out the best next steps forward for you and your business, get in touch with Clarke Bell today for free, confidential advice, and let us find a solution that works for you.