Further to the announcement of the second lockdown and the extension of the Furlough Scheme, the Chancellor has made changes to the Self-Employed Income Support Scheme that will apply immediately.
The Chancellor has increased the grant available for November from 40% to 80% of average trading profits, whilst the grant for December and January remains at 40% of profits. The cap for the grant for the 3 months ended 31 January 2021 has therefore been increased from £3,750 to £5,160.
In addition, the claims window will now open on 30th November until 14th December, so businesses that are adversely affected by COVID can access a larger grant sooner.
The Government has also extended the deadline for applying for Government-backed loan schemes to 31st January 2021.
Responding to the announcement of fresh business support measures by the Prime Minister Boris Johnson in the Commons, Federation of Small Businesses (FSB) National Chairman Mike Cherry, said: “It’s a relief to see the Prime Minister listening to some of our calls for extra support for small businesses and the self-employed. The uprating of the Self-Employment Income Scheme to 80% for November is generous and will likely help around two million self-employed people – bringing forward the application date is helpful.
“However, many of our self-employed are still not included in the initiative. This is a five-million strong community that drives our economy forward, but the Government has insisted that large swathes of it do not warrant any help where income is concerned. We have sadly already seen 250,000 self-employed people stop working and become economically inactive, a figure which is set to continue rising.
“Our recommendation for an emergency loan application deadline extension has been embraced which is encouraging. We are now speaking with the Treasury about the installation of the option to top-up these facilities given that many sought them months back, when the full extent of disruption was unknown. They should be allowed to apply for a second time. We also need to see lenders opening their doors to new customers again. Without this, the impact of the extension will be minimal.
“The Government has committed to looking again at the reinstatement of the unfair Minimum Income Floor for self-employed people accessing Universal Credit. We now need to see words turned into action. It is cruel to impose a false assumption of earnings just as people need support the most.
“The cash grants on offer are important but are not as generous or comprehensive as the Small Business Cash Grants provided in the Spring – most won’t even be enough to cover rents. The restrictions imposed on firms are stifling settings which SAGE advisers state have a minimal impact on the R rate.
“At the same time, far too many small firms are still being caught by an outdated, bruising business rates system and are looking to 2021 with a sense of real foreboding, wondering how they will be able to afford government-imposed upfront costs without any revenues.
“To address the looming unemployment crisis we now need to make it cheaper to employ people by reducing employer national insurance contributions, creating new support measures for those looking to set up firms and become self-employed, and introducing UK Transition Vouchers to help small businesses as they attempt to manage both a new trading relationship with Europe and fresh restrictions linked to Covid.
“Fundamentally, the business support landscape still remains too much of a mixed picture – a fact made all the more concerning given that this fresh lockdown in England is taking effect during the critical festive season. There are those – including company directors, the newly self-employed, start-ups, those without physical premises and those further down supply chains in especially hard-hit sectors – who are struggling to access any meaningful support at all. Until these cracks are addressed, our economic recovery is destined to keep faltering.”