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The government’s job retention funding

Published on 21st April 2020 - Last update on 4th May 2020

The lockdown has meant that pubs and shops have been forced to close by government edict, factories have closed because supply chains have been cut - and many other businesses have found that they have no customers or clients.

Two-thirds of firms have furloughed at least some portion of their workforce.

The crisis now means that many jobs are currently at risk. The government is working to provide solutions for those businesses that are worst affected. 

An initial £330 billion of funding will be made available, equivalent to 15% of UK GDP, to help companies during this difficult period - and the Coronavirus Job Retention Scheme may provide a lifeline for employees who have been furloughed.

Coronavirus Job Retention Scheme and you

The Coronavirus Job Retention Scheme is designed to help employers whose operations have been affected by Coronavirus (COVID-19) to retain their employees. If you cannot pay your workforce you can furlough employees and it lets you apply for a grant that covers 80% of their usual monthly wage costs, up to £2,500 a month, as well as your National Insurance contributions.

You can also apply for Sick Pay support if your workers are showing signs of symptoms of the virus and you need to send them home.

The Coronavirus Job Retention Scheme (CJRS) officially went live on Monday 20th April, opening 10 days ahead of schedule. 

Such is the demand, it received 67,000 claims within 30 minutes of its opening. By the close of business, 140,000 companies had applied for support under the scheme.

The government has made sure that the system is fit for purpose, and the online system can process 450,000 applications each hour. The intention is for each approved claim to be distributed by BACS within six working days.

With April’s payday approaching, the scheme could present a vital lifeline for employers and employees alike.

The head of HMRC, Jim Harra, has promised that all employers who claim the scheme between April 20 and April 22 should receive their funds by April 30.

How much can you claim?

The scope of CJRS was recently extended to include employees on PAYE payroll on or before March 19, allowing them to claim up to £2,500 per month, per employee, for staff wages.

For employers placing under 100 employees into CJRS, they need to be PAYE online-registered and provide:

  • UK bank account number and sort code
  • Employer PAYE scheme reference number
  • The number of furloughed employees, as well as their NI number and payroll/employee number, where applicable
  • The start and end date of the furlough claim
  • The total amount being claimed, including employer NI and minimum pension contributions

Employers placing over 100 employees onto CJRS will need to upload a file with each employee’s full name, NI number, furlough start date and end date, if known, as well as the full amount claimed. Including the employee’s payroll number is optional.

HMRC has issued guidance to mitigate the initial influx of applications, requesting that CJRS users only contact the tax body if their claim has not been processed within 10 working days.

The scheme could mean that when the crisis is over, your business will still have a workforce that is ready to come back to work. Just as important, it could help you ensure that you still have a business for them to come back to.

Support for the self-employed

Self-employed workers have not been forgotten, although they may be outside the scope of the CJRS scheme.

The self-employed can now access Universal Credit in full at a rate equivalent to Statutory Sick Pay for employees.

This scheme will allow them to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.

So if you are a sole trader, you may be able to access government help. 

Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment.

Details of the scheme are currently being worked out. You should keep looking at the government website for announcements. 

Borrowing the money you need as an employer

The government’s funding schemes could provide a lifeline to many businesses. But you may find that they cannot provide all the funding your business needs at this time. 

Fortunately, there are commercial lending solutions which can help and, at Rangewell, we are working to ensure that in the current emergency situation, you can access the funding you need.

This demands our knowledge of the lending industry. Some lenders are reconsidering their positions - and some have even withdrawn from the market. We know the lenders who are still ready to help with your funding needs. 

So if your need is for cashflow support lending - a short-term unsecured loan - we can help you borrow from £1,000-£500,000, or up to £5m through the Coronavirus Business Interruption Loan Scheme (CBILS).

We can also provide support with other solutions such as Revolving Credit Facilities – also known as Overdraft Replacement - to give you access to cash as you need it, and with no changes when you do not draw down funds. 

We can also find solutions such as Asset Refinance and Commercial remortgages to help you call on the investment you have already made in your business, and release it to provide the cash you need now.

Getting professional help with your finance needs

At Rangewell we help secure all types of funding for all types of business – and during the current crisis we can provide the quickest way to find the funding you need.

Call us now – our experts are ready to help you with your finance problems during the coronavirus crisis.

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