New support for businesses impacted by lockdown restrictions
The Chancellor Rishi Sunak has announced further financial support for businesses impacted by coronavirus restrictions.
Today (Thursday, October 22), the Chancellor said the Government would increase its contribution under the new Job Support Scheme so that businesses would only have to pay 5% of wage costs.
He also said that business grants would be expanded to cover businesses in particularly affected sectors in high-alert level areas (Birmingham, London, Nottingham), helping them stay afloat and protecting jobs.
Rishi also said that grants for the self-employed will be doubled to 40% of previous earnings.
Details of the announcement are as follows:
When originally announced, the JSS – which will come into effect on November 1, 2020 – saw employers paying a third of their employees’ wages for hours not worked, and required employers to be working 33% of their normal hours.
The revision reduces the employer contribution to those unworked hours to just 5%, and reduces the minimum hours requirements to 20%, so those working just one day a week will be eligible. That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.
Employers will continue to receive the £1,000 Job Retention Bonus.
This announcement increases the amount of profits covered by the two forthcoming self-employed grants from 20 per cent to 40 per cent, meaning the maximum grant will increase from £1,875 to £3,750.
This is a potential further £3.1 billion of support to the self-employed through November to January alone, with a further grant to follow covering February to April.
The Chancellor has also announced approved additional funding to support cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert level areas. These grants will be available retrospectively for areas who have already been subject to restrictions, and come on top of higher levels of additional business support for Local Authorities moving into Tier 3 which, if scaled up across the country, would be worth more than £1 billion.
These grants could benefit around 150,000 businesses in England, including hotels, restaurants, B&Bs and many more who aren’t legally required to close but have been adversely affected by local restrictions nonetheless.
Read the Chancellor’s full statement here
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