Posted by jonathanfullarton - October 26, 2020 12:14 pm
Additional updates on Winter Economy Plan measures
On Thursday 22 October, Chancellor Rishi Sunak announced further measures to help businesses facing challenges as a result of Covid-19. These include updated measures to proposals announced in his Winter Economy Plan in order to take into account the rise in Covid-19 and the impact of businesses in tier 2 and 3 regions.
The measures included an update to the new Job Support Scheme, an increase in the Self-Employed Income Support Scheme and additional Direct Grants to assist businesses in hospitality, leisure and accommodation sectors.
Direct Cash Grants
The government announced more support for businesses in the hospitality, leisure and accommodation sectors with additional Direct Cash Grants, which will be managed by local authorities. The government will provide local authorities with enough funding to provide £2100 per month for businesses coping with tier 2 restrictions. For more details please contact your local authority.
Self Employed Income Support Scheme (SEISS)
The Chancellor announced a doubling of SEISS from 20% to 40% of people’s incomes increasing to a maximum grant of £3,750.
Job Support Scheme
The Job Support Scheme was introduced by Chancellor Rishi Sunak on 24 September as part of his Winter Economy Plan. The scheme will begin from 1 November and will replace the Coronavirus Job Retention Scheme (CJRS). However, on Thursday 22 October Mr Sunak announced amendments to the scheme to take into effect the impact of businesses facing tier 2 and three lockdowns.
Job Support for closed businesses
For businesses which are legally required to close the government will pay two thirds of people’s salaries where they are unable to work for a week or more. More details of the Job Support Scheme (closed) are detailed in the document below.
Job Support for businesses which remain open but whose takings are affected by Covid
The government has realised that the impact on businesses, particularly in the hospitality, leisure and accommodation sectors, is more significant than originally thought. Therefore, the Chancellor has made two changes to the short-term work scheme in a bid to help employers retain staff.
- Employees now need only work 20% of their hours (reduced from 33%).
- The employer contribution for hours not worked will be reduced from the originally planned 33% to 5%, lower than the furlough scheme.
Eligibility
The scheme is open to all small businesses and larger businesses that can show an impact on revenues. The scheme will break down as JSS (Open) for those businesses who are safe to continue to trade in less high-risk areas but which are nevertheless facing economic difficulties as a result of Covid. For businesses, which are required to close their business, for those businesses in high-risk areas businesses can apply under JSS (Closed).
Please note under CSS open – large employers (250 or more employees on 23 September 2020) wanting to use JSS Open must also show that their trade has been affected by coronavirus to qualify.
Whilst more details on the plan are expected later this week, the government has published the following document providing more detail and examples.
Comparison snapshot of what you can claim under each scheme
Under CJRS (often referred to as the furloughing scheme:
Employer pays 20%
Government pays 60%
Employee salary drops by 20%
(Ends 31 October)
From 1 November
Job Support Scheme for business forced to close (in Tier 3)
Government pays 67%
Pay falls by 33%
Part-time Job Support Scheme for other businesses affected by Covid (other tiers)
Employees must work 20% of their hours
Employer pays 4%
Government pays 49%
Pay falls 27%
National Insurance and pension contributions
Regardless of scheme, employers must pay the National Insurance and pension contributions for their employees.
For more details please on the changes to the Job Support Scheme please click here. Or alternatively, please contact your local MFW office for more advice.
