OVERVIEW
This Bulletin covers the Chancellor of the Exchequer’s announcements, made this afternoon, for additional financial support for businesses affected by Covid-19 restrictions.
INTRODUCTION
The key measures are:
- The Job Support Scheme (JSS) will be expanded to support businesses across the UK that are required to close their premises due to Coronavirus restrictions
- The Government will pay two-thirds of employees’ salaries to protect jobs over the coming months
- Cash grants for businesses required to close in local lockdowns will also be increased to up to £3,000 per month
THE DETAILS
Under the JSS expansion, firms whose premises are legally required to shut for some period over winter as part of local or national restrictions will receive grants to pay the wages of staff who cannot work thus, it is hoped, protecting jobs and enabling businesses to reopen quickly once restrictions are lifted.
The Government will support eligible businesses by paying two thirds of each employees’ salary (or 67%), up to a maximum of £2,100 a month.
Under the scheme, employers will not be required to contribute towards wages and will only be asked to cover NICS and pension contributions, which are a small proportion of overall employment costs. It is estimated that around half of potential claims are likely not to incur employer NIC’s or auto-enrolment pension contributions and so face no employer contribution.
Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days.
The scheme will begin on 1st November and will be available for six months, with a review being undertaken by the Government in January 2021. In line with the rest of the JSS, payments to businesses will be made in arrears, via a HMRC claims service that will be available from early December. Employees of firms that have been legally closed in the period before 1st November are eligible for the Coronavirus Job Retention Scheme (CJRS).
In addition to expansion of the JSS, the Government is increasing the cash grants to businesses in England shut in local lockdowns to support those with fixed costs. These grants will be linked to rateable values, with up to £3,000 per month payable every two weeks, compared to the up to £1,500 every three weeks which was available previously.
This could benefit hundreds of thousands of businesses, including restaurants, pubs, nightclubs, bowling alleys and many more.
These measures will sit alongside the recently announced original JSS, which is designed to support businesses that are facing low demand over the winter months, and the £1,000 Job Retention Bonus scheme (JRB) which encourages employers to keep staff on their payrolls.
Further guidance on the scheme will be set out by HMRC ‘in due course’.
COVERAGE AND EXPANSION INFORMATION
This JSS scheme will cover businesses that, as a result of restrictions set by one or more of the four governments in the UK, are legally required to close their premises.
This includes businesses that are required to provide only delivery and collection services from their premises – or food and drink outdoors from their premises. To be eligible employees must be employed and an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 23rd September.
- Under the scheme, employees will need to be furloughed for a minimum of seven consecutive days at any given time and the payments to employers will be made monthly in arrears.
- The Government is now making this scheme more generous so that businesses receive up to £3,000 per month, rather than up to £1,500 per three weeks, and they are eligible for payment sooner, after only two weeks of closure rather than three.
- Small businesses with a rateable value of or below £15,000 can now claim £1,300 per month; medium sized businesses with a rateable value between £15,000 and £51,000 can claim £2,000 per month; and larger businesses can claim £3,000.
- The Government is also extending the scheme to include businesses which have been forced to close on a national rather than a local basis.
- The Government will also continue to help Local Authorities. Those at the highest levels of Coronavirus incidence will continue to receive targeted funding based on population size to support test, trace and contain activities at this stage of the national Covid-19 response. This is on top of £3.7 billion in grants to address Covidrelated pressures, and £300 million for Local Authorities to develop outbreak plans, already allocated across England.
- The Government has previously committed £400 million to support Local Authorities’ Test, Trace and Contain Activities in England.
- Broader government support to Local Authorities in England due to Covid-19 includes:
- Over £3.7 billion of non-ring-fenced grant funding to help them respond to pressure across all their services
- Over £1.1 billion ring-fenced to support Social Care providers, helping to tackle the spread of the virus
- A down payment of £50 million to set up and run the Test and Trace Support Payment: £500 for low-income workers who can’t work from home and are told to self-isolate. The Government will fully fund the costs of this scheme, including £15 million in discretionary funds
- The Government will provide a further £30 million to Local Authorities to improve compliance with, and enforcement of, non-pharmaceutical interventions (such as self-isolation and business closures) over the next four months, including through COVID-19 Marshalls
Further details on the expanded JSS can be found via this link: Job Support Scheme Expansion for Closed Business Premises
We will issue further advice and guidance Bulletins as the Covid-19 situation develops.
Henry Boyle
2030hrs 9th October 2020
