Rishi Sunak announced big changes to the support packages offered by the government in the House of Commons today after growing demand from firms in tier two areas.
Changes to the Job Support Scheme (JSS)
When originally announced, the JSS – which will come into effect on 1 November – saw employers paying a third of their employees’ wages for hours not worked and required employees to be working 33% of their normal hours.
Minimum Hours Requirement reduced to 20%
Today’s announcement reduces the employer contribution to those unworked hours to just 5%, and reduces the minimum hours requirements to 20%, so those working just one day a week will be now eligible. That means that if someone is being paid £587 for their unworked hours, the government will be contributing £543 and their employer only £44.
The government will provide up to 61.67% of wages for hours not worked, up to £1541.75 per month (more than doubling the maximum payment of £697.92 under the previous rules).
For example: a typical full-time employee in the hospitality industry is paid an average of £1,100 per month. Under the Jobs Support Scheme for open businesses, they will still take home at least £807 a month. All the employer needs to pay is a total of £283 a month or just £70 a week; the government will pay the rest.
Has the Job Retention Bonus changed?
Employers will continue to receive the £1,000 Job Retention Bonus.
The Job Support Scheme for businesses legally required to close remains unchanged.
Is the Job Support Scheme available to any business?
The scheme will, as before, be open to all small businesses and larger businesses that can show an impact on revenues.
It is aimed at addressing the gap in support for businesses in tier two restrictions, such as London and Birmingham, but is not explicitly tied to that status, and is available across the UK.
The Self-employed Income Support Grant (SEISS) has been increased
The government has also increased the amount of profits covered by the two forthcoming self-employed grants from 20 per cent to 40 per cent, meaning the maximum grant will increase from £1,875 to £3,750.
Can I claim Self Employed Income Support if I am still trading?
The government will provide two taxable grants to support those experiencing reduced demand due to COVID19 but are continuing to trade, or temporarily cannot trade.
Grants will be paid in two lump sum instalments each covering 3 months. The first grant will cover a three-month period from the start of November 2020 until the end of January 2021. The government will pay a taxable grant which is calculated based on 40% of three months’ average trading profits, paid out in a single instalment and capped at £3,750.
The second grant will cover a three-month period from the start of February until the end of April 2021, again based on 40% of three months’ average trading profits.
Local Authority Business Grants
The Chancellor has also announced cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert level areas. These grants will be available retrospectively for areas who have already been subject to restrictions and come on top of higher levels of additional business support for Local Authorities moving into Tier 3.
Local Authorities in Tier 2 areas will receive funding to issue grants as follows:
- For properties with a rateable value of £15,000 or under, grants of £934 per month.
- For properties with a rateable value of between £15,000-£51,000, grants of £1,400 per month.
- For properties with a rateable value of £51,000, grants of £2,100 per month.
This is equivalent to 70% of the grant amounts given to legally closed businesses.
Local Authorities will also receive a 5% top up amount to these implied grant amounts to cover other businesses that might be affected by the local restrictions, but which do not neatly fit into these categories.
Is my business eligible for a local authority grant?
It will be up to your Local Authority to determine which businesses are eligible for grant funding in your local areas, and what precise funding to allocate to each business.
Click here for information from Gov.UK on the latest changes to the Covid19 support package
As soon as we have more information we will of course, provide updated guidance
We hope this information helps you and we are here for you during this difficult time. We will continue to keep you updated as the Government releases new information. Our business contingency plan is in place and we will do everything we can to support our clients during this uncertain period, please do not hesitate to contact us here if you have any concerns or queries
Visit our COVID19 Business Hub for more information
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The information contained above is for general guidance purposes only. Whilst every effort has been made to ensure the contents are accurate, please note that each individual has different circumstances and it is essential that you seek appropriate professional advice before you act on any of the information contained herein. HB Accountants can accept no liability for any errors or omission or for any person acting on or refraining from acting on the information provided in the above
