Financial Support For Self-Employed ‘Being Considered’

Financial Support For Self-Employed ‘Being Considered’
As England prepares to enter a second lockdown on Thursday, Michael Gove, Minister for the Cabinet Office, has hinted that the self-employed could be given additional financial support.

The support would last for the duration of the new national lockdown and comes after the furlough scheme, which had been due to end in October, was extended. The PM announced at the press conference on Saturday that workers and businesses across the UK will receive extra financial support during the second lockdown to curb the rise in coronavirus infections.

Following the PM’s address, the Treasury stated that there would be grants available for businesses in England forced to close. Linked to the rateable value of properties, they will be worth £1,334 – £3,000 per month.

Extension of the furlough scheme

Mr Gove told BBC One’s Andrew Marr Show yesterday that the announcement on Saturday concerned the extension of the furlough scheme until the end of November.

Also known as the Cornavirus Job Retention Scheme (CJRS), the announcement of the extension was greeted with relief by businesses. The programme will remain open until the end of December, with employees receiving 80pc of their current salary for hours not worked, up to a maximum of £2,500.

Other plans include grants worth up to £3,000 for business premises forced to close in England, to be given through the Local Restrictions Support Grant (LRSG). £1.1bn will also be given to councils to be distributed as one-off payments to local businesses.

Self-employed groups seek financial support

In the absence of a new announcement regarding financial support for the self-employed, groups such as the Federation of Small Businesses (FSB) are asking for winter support grants to be increased from covering 40pc of profits to something on a par with the support offered to employees. The grants, announced previously, were intended to cover three months.

The groups also want eligibility criteria to be reviewed to help those who have received no financial support so far.

Yet it is crunch time for business owners in the worst affected sectors, who have already taken out loans and seen their cash reserves drained by the crisis. Paying rent remains a major concern. And the timing of the lockdown so near to Christmas could not come at a worse time for those who have invested heavily in making their premises Covid-19 secure.

It is unclear exactly how badly the economy will be affected but it is not expected to shrink by as much as 20pc as happened in April during the first lockdown. Industries such as construction should be able to continue, while others have adapted, for instance, by expanding online ordering capacity.

Mortgage holidays to be extended

Last week, a study by the Joseph Rowntree Foundation found that 1.6m households, or 20pc of all mortgage holders, were concerned about paying their mortgage over the next three months.

Borrowers, who have reached the maximum six-month limit of their mortgage holiday and are still facing difficulty in making repayments, are advised by the Financial Conduct Authority (FCA) to speak to their lender regarding a tailored support plan.

According to figures from UK Finance, around 2.5m people have taken mortgage holidays since the start of the pandemic. These too had been due to end in October. But borrowers who have been affected by Covid-19 and have not yet had a mortgage payment holiday are now able to request a pause in repayments that can last up to six months.

Those who have already begun a payment holiday will be able to continue until they reach the six-month limit without this being recorded on their credit file.

The FCA is considering a payments holiday for people grappling with debts such as credit cards and personal loans. The organisation said it is working promptly with industry to establish whether a similar approach should be adopted for consumer credit products. But they say that borrowers should continue making repayments if they can afford to do so.

Further details of the extended mortgage holiday scheme are expected to be announced today.

QuickBooks Black Friday Week – Save 75% for 4 months – Offer ends 30th November
CLAIM NOW