A new day, a new announcement. That seems to be the “new normal” since we were faced with the disruption of this pandemic way back in March.
The latest involves a new government Covid scheme to pay up to half of wages for workers hit by restrictions after growing unrest from firms in tier two areas.
Businesses in tier two areas, particularly in the hospitality sector, had complained that they would be better off if they were under tier three restrictions.
They argued that although they would be forced to close, they would benefit from greater government support.
I can appreciate that right now this won’t affect all of our clients – many of you are still in tier one areas – but for those of you who are (or who may be further down the line) we have put together an outline of what it means.
What is the Job Support Scheme (JSS)?
This was put in place to replace furlough from November onwards.
When originally announced it involved employers paying a third of their employees' wages for hours not worked, and required employers to be working 33% of their normal hours.
But today Rishi Sunak made some changes to this policy.
The revision 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 eligible.
That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.
Employers will continue to receive the £1,000 Job Retention Bonus.
The scheme will, as before, be open to all small businesses and larger businesses that can show an impact on revenues.
The facts
The JSS starts to operate from 1 November and covers all of the UK. For every hour not worked, the employee will be paid up to two-thirds of their usual salary.
The government will provide up to 61.67% of wages for hours not worked, up to £1541.75 per month.
Employers using the scheme will also be able to claim the Job Retention Bonus (JRB) for each employee that meets the eligibility criteria of the JRB. This is worth £1,000 per employee.
Self-employed grant
Today’s announcement also increases 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.
This is a potential further £3.1 billion of support to the self-employed through November to January alone, with a further grant to follow covering February to April.
The facts
The government will provide two taxable SEISS grants to support those experiencing reduced demand due to COVID-19 but are continuing to trade, or temporarily cannot trade.
It will be available to anyone who was previously eligible for the SEISS grant one and grant two and meets the eligibility criteria.
Grants will be paid in two lump sum instalments each covering three 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. The government will review the level of the second grant and set this in due course.
Business Grants
On top of this, the Chancellor announced approved additional funding to support 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 which, if scaled up across the country, would be worth more than £1 billion.
These grants could benefit around 150,000 businesses in England, including hotels, restaurants, B&Bs and many more who aren’t legally required to close but have been adversely affected by local restrictions.
The facts
The government are providing additional funding to allow Local Authorities (LAs) to support businesses in high-alert level areas which are not legally closed, but which are severely impacted by the restrictions on socialising.
LAs will receive a funding amount that will be the equivalent of:
- 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 (worth up to £3,000/month).
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.
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 – the above levels are an approximate guide.
Businesses in Very High alert level areas will qualify for greater support whether closed (up to £3,000/month) or open.
So what are you entitled to?
This depends on what tier you fall into.
The alert levels - "medium", "high" and "very high" - are applied depending on local infection rates, and the government has released a full list of areas and which tier they fall under.
The medium alert level will cover most of England and will consist of the current national measures, including the rule of six and the 10pm curfew.
The high alert level reflects interventions in many areas subject to local restrictions, preventing mixing between different households indoors. Two households can meet in a private garden - rule of six and social distancing rules apply. Essex and London have recently been added to this list
The very high alert level will mean, at a minimum, the closure of pubs and bars and a ban on social mixing indoors and in private gardens.
What next?
Detailed guidance on the expanded JSS is expected in advance of the scheme coming into force on Sunday November 1st.
For more information on the JSS see the Job Support Scheme Open Factsheet
For more information on the self employed help, see the HMRC website
For more information on Business Grants see the Government’s Business Grants Factsheet
If you think you might be eligible for help and want some guidance, give us a call today.