Now that we are in week 2 of our circuit-break lockdown, the pressure on some businesses is mounting and thankfully the Government has responded.
There is now a suite of Government support schemes, however I would like to touch upon 3 of the key ones in this newsletter:
Coronavirus Business Support Scheme – Circuit Break Lockdown (CBL)
The ‘Government Grant’ is back, only this time it has been set at £1,500, rather than £3,000.
There are also slightly different eligibility requirements this time. Most noticeably, the applicant must be able to demonstrate that it has genuine business overheads of at least £250 per month, which doesn’t include salary costs or purchases of stock (see full list below), as well as various other costs. Rent paid on commercial business premises are considered to be eligible expenses for the purpose of the scheme.
The following qualify as eligible business overheads and expenditure, in respect of the £250 pcm requirement:
- Rent on commercial business premises (to be paid to independent third parties only);
- Commercial premises operating costs including rates, utilities, insurance, cleaning;
- Audit & accountancy fees;
- IT operating costs including licenses;
- Leasing costs (to be paid to independent third parties only);
- Routine bank charges;
- Capital (business and loans) or interest repayments;
- Mortgage payments (for business premises);
- Supplier invoices;
- Purchases of fuel and equipment (business use only); and
- Other reasonable costs as agreed by the Department on a case by case basis.
The following DO NOT qualify as eligible business overheads and expenditure:
- Salary costs;
- Personal costs;
- Payments to related entities (with the exception of payments in respect of shared costs within a group structure and subject to the Department’s discretion);
- Directors fees and capital expenditure of any kind (vehicles, IT, premises etc.)
Applications must be made before 31 January 2021.
The full scheme guidelines are available ‘here’.
Applications for the grant can be made ‘here’.
The Salary Support Scheme (SSS)
This has been opened up again to business that were originally eligible to claim back in March 2020. It provides financial assistance to any qualifying business of up to £280 per week for a full-time equivalent employee.
Some key points are:
1) The scheme has been opened for an initial 4-week period from 4 January to 31 January 2021.
2) Employers should wait until 31 January has passed before submitting their application.
3) Applications for claim periods must be made no later than 30 days after the end of the month in which the payments of salary were made.
4) To be eligible to claim, businesses should be able to demonstrate a reduction in revenue as a result of COVID-19, of at least 25% due to reduced demand or closure during the period of the financial assistance claim.
5) A comparison of turnover for the same period in 2019 should be used to determine whether there has been a reduction in revenue.
Other conditions also apply, which can be found on the Government site ‘here’.
The application form can be found ‘here’.
Manx Earnings Replacement Allowance (MERA)
This has been opened up again, initially for a 3-week period from 11 January 2021 to 31 January. It will provide an income of £200 a week to people who have either been laid off or made redundant from their employment, or have lost their self-employed work, since 4 January 2021.
Claims should be made within 1 month from the date that eligible individuals became unemployed, or the last day worked.
If lockdown is extended, then I expect MERA will be too.
The guidance can be found ‘here’.
Claims can be submitted ‘here’.
The key to each of these schemes is eligibility. If you are unsure whether you are eligible for one of the schemes, please pick up the phone and we may be able to help. If you would like help making your claim please let us know.
In the meantime, stay safe.
Phil, and the Harding Lewis Team.
Disclaimer: Please note that the information provided is believed to be correct at the time of writing. During the COVID-19 pandemic, changes to the Government support initiatives happen very quickly and you should always ensure you have read the most up to date guidance before applying. This newsletter is designed to provide a summary and not all the relevant factors are covered. If in doubt, always seek professional advice before submitting a claim.