Lockdown restrictions are easing after the coronavirus pandemic, but businesses continue to apply for government support loans in their droves.
At the end of last month, more than 745,000 firms in the UK had taken advantage of coronavirus loans worth in excess of £31.3 billion.
Bounce-back loans accounted for £21.3bn, £8.9bn in business interruption loans went out, followed by £1.1bn in large business interruption loans.
In the week ending 31 May 2020 alone, more than £3.8bn in emergency loans was provided to around 94,000 firms through the three loan schemes.
That’s a lot of money that the Treasury will have to reclaim in the years ahead, on top of the astronomical sums handed out in grants.
Winding down the furlough scheme
The coronavirus job retention scheme has been extended until 31 October 2020, and a taper kicks in for employers from August.
Under the current iteration of the scheme, employers are not required to pay anything towards furloughed workers’ wages.
From 1 August 2020, employers will resume paying class 1 national insurance contributions (NICs) and workplace pension contributions.
At the start of September, the Treasury will pay 70% of wages up to a cap of £2,187.50. Employers will pay 10% of wages on top of NICs and workplace pension contributions.
In October, the Treasury will pay 60% of wages up to a cap of £1,875. In addition to their NICs and any workplace pension contributions, employers will pay 20% of wages.
Subject to any further change, the furlough scheme will come to an end on halloween, while an Autumn Budget is expected around the same time.
“Second and final” self-employment grants
Chancellor Rishi Sunak announced a “second and final grant” under the self-employed income support scheme (SEISS) will be on offer in August.
The second grant will cover 70% of average monthly trading profits for three months, and will be capped at a total of £6,570.
Applications through the SEISS for the first taxable grant, worth 80% of trading profits or up to £7,500, are available until 13 July 2020.
Eligibility for the second lump sum remains the same as the first tax grant, with owners having to prove coronavirus has impacted on their business.
Just like the first taxable grant, which we wrote about in April, we cannot apply for the funding on your behalf although we can help you with your application.
What else can we do for you?
Despite COVID-19 keeping unusually busy at this time of year, we are here to help you and your business through this difficult time.
Whether you need assistance with any form of coronavirus-related government support or want to re-evaluate your cashflow, we can help.
To find out more, contact us on firstname.lastname@example.org or call 01363 773191.