Alterations to the Job Support Scheme
On October 22nd, Chancellor Rishi Sunak acknowledged the rising pressure that many sectors are facing amid the second wave of coronavirus.
When he originally unveiled the Job Support Scheme (JSS) as part of his Winter Economy Plan, employers were due to pay a third of their employees’ wages for hours not worked. Meanwhile workers had to be able to work a minimum of 33% of their contracted hours.
For businesses that can remain open, Mr Sunak has opted to reduce the employer’s contribution towards unworked hours to only 5%, with the government covering 62%, up to a maximum of £1,541.75 per month. Meanwhile the minimum number of contracted hours for eligible employees are required to work has also been cut to 20%.
For businesses legally forced to close due to Covid, the Government had previously announced they would pay 67% of employees’ wages, to a maximum of £2,083.33 per month, and employers will not have to contribute towards wages costs.
For both JSS schemes, employers will need to fund National Insurance and minimum automatic enrolment pension contributions.
This move is likely to be widely welcomed particularly in the struggling hospitality and leisure sector.
Self-Employed Income Support Scheme doubled for forthcoming grant
The Government is due to pay two taxable Self-Employed Income Support Scheme (SEISS) grants to cover November 2020-January 2021 and February 2021-April 2021.
The Chancellor has doubled the first of the forthcoming grants from 20% to 40% of a self-employed individual’s (including members of partnerships) three months’ average trading profits. This will be capped at £3,750 and paid in a single lump sum.
As yet, the level of the second grant overing February to April 2021 has not been set but this will be announced at a later date.
Local Restrictions Support Grant (Tier 2) – England only
Mr Sunak also announced that additional funding will be available to local authorities nationwide, giving them the wherewithal to distribute direct cash grants worth up to £2,100 a month to underpin eligible hospitality, leisure and accommodation businesses affected by high-alert (Tier 2) level areas.
These are locations where firms are not legally obliged to close their doors but have been severely affected by increased restrictions on social interactions.
The new grants will be made available for every month the Tier 2 restrictions apply. It amounts to 70% of the direct cash grants made available to legally closed businesses in Tier 3 restrictions.
The Government has recommended that local authorities provide grants based on a firm’s rateable value:
- Properties with a rateable value of £15,000 or less - £934 per month
- Properties with a rateable value of £15,001-£51,000 - £1,400 per month
- Properties with a rateable value of £51,001 or more - £2,100 per month
Businesses will also be able to receive these direct cash grants backdated to August.
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Last updated: 23rd October 2020