UPDATED: Chancellor Rishi Sunak has made changes to the Job Support Scheme, making it more generous, offered grants for businesses in Tier 2 regions with their business restricted due to Covid restrictions and doubling help for the self-employed.
Mr Sunak made the announcement about changes to the Jobs Support Scheme, grants for restricted businesses in Tier 2 and increased help for the self-employed in the House of Commons this morning, responding to the worsening Covid pandemic.
Job Support Scheme changes
- The Job Support Scheme has been made more generous, with employers only contributing 5 per cent of wage bills for employees on days not worked. And, rather than having to work at least half their usual hours, now employees only have to work 20 per cent of minimum hours, so those working just one day a week will be eligible.
- The scheme will run for six months from November 1 2020. Employers will be able to make a claim online through Gov.uk from December 8 2020. They will be paid on a monthly basis. Grants will be payable in arrears meaning that a claim can only be submitted in respect of a given pay period after payment to the employee has been made and that payment has been reported to HMRC via an RTI return
- The Self-employed Income Support Scheme (SEISS) will be more generous, with the government covering an average of 40 per cent of lost profits compared to the current 20 per cent, meaning the maximum grant will increase from £1,875 to £3,750
- Any business in Tier 2 with its business restricted, such as hospitality, accommodation and leisure, can now claim a monthly grant of £2,100 backdated to August. This is 70 per cent of the £3,000 grant available for business closed in the highest Tier 3 level. With grants for businesses in hospitality, leisure, and tourism being backdated to August, businesses under restrictions can claim up to £4,200 from today.
Tier 2 means that only households can meet inside for a drink or a meal, outside gatherings are limited to six people and businesses have to close at 10pm.
Mr Sunak said he had talked to business leaders in the hospitality sector and “the impact is worse than they hoped with a strong reduction in customer demand”.
This is the third time in one month that the chancellor has had to revise his Covid business support package.
“I make no apology for responding to changing circumstances,” said Mr Sunak. “A regional tiered approach to Covid restrictions is the right one.”
However, Mike Cherry of the Federation of Small Businesses said that today’s announcement did nothing to help company directors and the newly self-employed, both of whom are still excluded from support.
Cherry said company directors and those who have only recently gone into business for themselves “are now facing a significant depression in trade caused by these new restrictions and in many cases have no business at all”.
Commenting on the new measures, employment lawyer Rhys Wyborn at Shakespeare Martineau said: “The chancellor may well have just saved Christmas for ‘open but struggling’ businesses, large and small.”
But Musab Hemsi, a partner at LexLeyton, said there was a “woeful lack of clarity and guidance” around the Jobs Support Scheme changes with just one week to go before it goes live.
Hemsi said: “The government must urgently publish flexible and clear guidance on the Job Support Scheme to give much-needed certainty to businesses at this crucial time.”
Job Support Scheme what it means for your small business