31st October 2020 was originally the milestone date when the Government planned to cease to support businesses, including the end of the furlough scheme. However, in recent weeks the Government has extended the support schemes in place, inclusive of announcing a replacement to the furlough scheme; namely the Job Support Scheme.
The Chancellor unveiling additional assistance for employees and firms has been largely welcomed, considering the negative economic impact on businesses as restrictions are imposed in areas where COVID-19 cases continue to rise. Businesses forced to shut in areas being consigned to tier 3 lockdown restrictions will be applicable for emergency support. In broader terms, the Government has made three key changes to current support schemes.
Enclosed are the three new measures: –
New Support Grants
- This is a new support scheme for businesses in tier two areas, enabling local authorities to distribute grants of up to £2,100 each month to those worst affected.
- Payments will be backdated for any area under these rules since August 2020.
- Businesses supported include hotels and restaurants (as well as other types of enterprises), which are not legally required to close but have been adversely affected by local restrictions.
JSS (Job Support Scheme)
- The JSS rules have been amended for firms that have not been forced to close, but operate in an area under tier two restrictions. Instead of requiring employees to work for 33% of their original hours, they now need only to be employed for 20% of their hours.
- The employer contribution to salary costs for employees not working have been cut from 33% to 5% for businesses operating in areas applicable to all alert levels.
SEISS (Self-Employed Income Support Scheme)
- The Government announced increasing the grant from 20% of previous earnings to 40% to a maximum of £3,750 per month.
The new adjustments are a welcome measure for businesses, employers and employees who are trying to operate during this ongoing pandemic. We still have a long journey ahead of us as a nation, but a supportive stance by the Chancellor — and wider Government — will hopefully have a positive impact and allow businesses to continue to survive. Furthermore, it is hoped that the Government continue to be proactive in their approach to the COVID-19 crises.
A further breakdown of pertinent details on each of the support measures mentioned above are to follow in forthcoming blog posts-
SEISS and New Business Support Grants.
At WHA we are working to ensure you are up to date with all the latest support measures and legislation changes.
