Breaking News: Increased financial support for businesses and employees announced
On 22 October 2020, the Chancellor made a statement unveiling additional Government support to protect jobs and businesses over the coming months.
Here is what we know so far from the Chancellor’s announcement on 22 October 2020:
Job Support Scheme (JSS)
There will be two strands to the JSS, as outlined below.
Job Support Scheme Open
The Job Support Scheme Open aims to protect jobs in businesses which are not being forced to close, but who are facing lower demand due to coronavirus.
• When originally announced, the JSS, which is due to start on 1 November 2020, saw employers paying a third of their employees’ wages for hours not worked, and required employees to be working at least 33% of their normal hours.
The employer contribution to those unworked hours has today been reduced to 5%, and will now require employees to be working only 20% of their normal hours. This means that those working just one day a week will be eligible.
The Government will pay 61.67% of an employee’s wages for hours not worked, up to a maximum of £1,541.75 per month.
• Employers will still be able to claim the Job Support Bonus for each employee that meets the eligibility criteria.
Job Support Scheme Closed
The Job Support Scheme Closed aims to help businesses pay their employees’ wages if they are legally required to close due to coronavirus restrictions placed upon them.
• This element of the Job Support Scheme remains unchanged. You can find out more about this on our website here.
Cash Grants for Businesses in Tier 2 areas
• Businesses in high-alert level areas who may be severely adversely impacted by the restrictions but are not legally forced to close will be able to apply for additional Government support via a direct cash grant of up to £2,100 per month.
These grants are primarily for those businesses such as hotels, restaurants and B&B’s etc. in the hospitality, accommodation and leisure sector and will be retrospective. This means that any business that has been under enhanced restrictions since August can backdate their grant.
Local Authorities will receive a funding amount that will be the equivalent of:
Rateable value of £15,000 or under: grants of £934 per month.
Rateable value of £15,000 - £51,000: grants of £1,400 per month.
Rateable value of £51,000: grants of £2,100 per month.
In addition, Local Authorities will receive a further amount of 5%, which can be used to help other businesses who may not fit into the categories outlined above.
The above levels are an approximate guide as it will be up to Local Authorities to determine which businesses are eligible for grant funding in their local areas, and what precise funding to allocate to each business.
• These grants are separate to the grants of up to £3,000 per month which have already been made available to businesses who have legally been forced to close due to restrictions imposed upon them in Local Authorities moving into Tier 3.
Self-Employed Income Support Scheme (SEISS) Grants
• Two grants will be available under this scheme in the coming months.
• The first grant is a lump sum payment covering the three months from November 2020 to January 2021. This will now be based on 40% (up from 20%) of average monthly trading profits, capped at a total of £3,750 (up from £1,875).
• The second grant will be a lump sum payment covering the three months from February to April 2021. The level of this grant will be set in due course.
• Regardless of whether a self-employed person lives in a Tier 1, 2 or 3 area, the grants will be available if they have had to temporarily stop trading, or are facing significant reduced demand – provided that the relevant conditions are met.
We are here to help
We have only been able to touch on some of the key points of the announcements made on 22 October 2020 and further detailed information has yet to be announced. Our team will be back in touch when we are able to provide more specific guidance, in particular regarding the JSS.
Please do not hesitate to get in touch with the Naylor Wintersgill team on 01274 733184 or email firstname.lastname@example.org we will be happy to discuss any queries or concerns you may have.