Cash grants for businesses under new Job Support Scheme

Businesses being forced to shut down due to local COVID-19 restrictions can 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 third tier in particular requires many businesses, specifically in the hospitality industry, to close for an indeterminable time.

Before the restrictions were introduced, Chancellor Rishi Sunak announced the Local Restrictions Support Grant (LRSG) scheme would be made more generous, in order to support businesses impacted by these changes. The scheme allows businesses to receive up to £3,000 per month.

Local Restrictions Support Grant scheme

The key information for employers:

• Businesses will 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.

Update – 8 December 2020: Local Restrictions Support Grant (for open businesses)

As well as the LRSG (for closed businesses) referenced above, Local Restrictions Support Grant (for open businesses) is now available. This supports businesses that have been severely impacted due to tier two or three temporary local restrictions.

Key information:

• Eligible businesses may be entitled to a cash grant from their local council for each 14 day period under local restrictions.
• Local councils have discretion to provide grant funding and freedom to determine the precise eligibility criteria.
• It is expected that funding will be targeted at hospitality, hotel, bed and breakfast and leisure businesses.
• Eligible businesses will be funded under the following tiers, unless there is a local need to deviate:
  – Businesses with a rateable value of £15,000 or less, will receive a cash grant of up to £467 for each 14 day period
  – Businesses with a rateable value over £15,000 and less than £51,000, will receive a cash grant of up to £700 for each 14 day period
  – Businesses with a rateable value of £51,000 or above, will receive a cash grant of up to £1,050 for each 14 day period

You should visit your local council’s website to find out how to apply.

In the event of national restrictions being introduced, LRSG (open) will cease to apply but other grants may be available.

Expanded Job Support Scheme summary

Key information:

• 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.

Update – 8 December 2020

The Job Support Scheme was due to come into force on 1 November 2020. However, with the announcement of the extension of the Coronavirus Job Retention Scheme until March 2021, the Job Support Scheme is now being postponed until after 31 March 2021.

The new start date and further details have not yet been released but we will provide an update once information is available.

Further support

For more information on the areas covered in this article or any other employment matter, please contact a member of the Employment team.

This content is correct at time of publication