InsightsInsight - Employment & HR - POSTED: October 20 2020
Cash grants for businesses under new Job Support Scheme
Financial support for businesses affected by local lockdowns
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Businesses being forced to shut down due to local COVID-19 restrictions can now receive higher cash grants and claim under the expanded Job Support Scheme (JSS).
On 13 October Prime Minister, Boris Johnson announced a three-tier system to combat the rapidly increasing rate of COVID-19 transmission across the UK. The system has already seen over half the population of England going under tighter measures.
The third tier in particular requires many businesses, specifically in the hospitality industry, to close for an indeterminable time.
Government support for businesses
The week before these restrictions were introduced, Chancellor Rishi Sunak announced the Local Restrictions Support Grant scheme would be made more generous, in order to support businesses impacted by these changes.
The scheme now allows businesses to receive up to £3,000 per month. Furthermore, the JSS has been expanded to pay part wages of employees.
Local Restrictions Support Grant scheme summary
We have summarised the key information for employers.
- Businesses will now be eligible for payment after two weeks of closure, rather than three weeks.
- Businesses with a rateable value of £15,000 or less will receive £667 per two weeks of closure (£1,334 per month).
- Businesses with a rateable value between £15,000 and £51,000 will receive £1,000 per two weeks of closure (£2,000 per month).
- Businesses with a rateable value of £51,000 or over will receive £1,500 per two weeks of closure (£3,000 per month).
- Affected businesses can apply through their local council.
- If your business does not require you to pay business rates your local council can still provide funding. However, this will be on a discretionary basis.
Expanded Job Support Scheme summary
- A business will be eligible to claim under this scheme if they are subject to restrictions and their employees are off work for a minimum of seven consecutive days.
- The government will pay 67% of an employee’s wages up to a maximum of £2,100 per month if a business is legally required to close.
- Employers will have to cover National Insurance and pension contributions.
- In line with the previous guidance on the JSS, this aspect will begin on 1 November for a period of six months. There will be a review point in January.
- Businesses can claim through the HMRC claims service from early December.
The three-tier system is already causing significant controversy, with many also pointing at the reduced levels of guaranteed employee income compared to furlough leave. It is hoped that the duration of any measures implemented would be relatively short-term, but obtaining employee consent now looks more difficult compared to six months ago.
For more information on the areas covered in this article or any other employment matter, please contact a member of the Employment team.
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