Extra COVID support unveiled for businesses

October 22nd, 2020

The Chancellor made a further announcement this morning to extend the economic support available to businesses that have been forced to legally close, as well as those that have remained open but who, nevertheless, are experiencing difficulties.

In recognition of the challenging times ahead, the Chancellor said he would be increasing the support that is already available through the existing Job Support and Self-Employment Schemes, whilst expanding business grants for those in high-alert level areas.

The details can be viewed here: https://www.gov.uk/government/news/plan-for-jobs-chancellor-increases-financial-support-for-businesses-and-workers

Further information is expected, but for now, a summary of the proposed measures is provided below:

Job Support Scheme (JSS)

The JSS will come into effect on 1st November, and the newly increased measures will be available to open businesses who are experiencing difficulty and is aimed to keep staff working.

Today’s announcement reduces:

The Government will provide up to 61.67% of wages for hours not worked, up to £1,541.75 per month

So, someone being paid £587 for their unworked hours, would see the Government contribute £543 and their employer just £44.

Employers will also continue to receive the £1,000 Job Retention Bonus.

The Job Support Scheme for businesses that are legally required to close remains unchanged.

Self-employment grant

Today’s announcement increases the amount of profits covered by the two forthcoming self-employment grants from 20% to 40%. This means that the maximum grant will increase from £1,875 to £3,750.

It is available to anyone who was previously eligible for the SEISS grant one and grant two, and meets the eligibility criteria.

Grants will be paid in two lump sum instalments each. The first will cover a three-month period from the start of November 2020 until the end of January 2021.

The Government will pay a taxable grant, which is calculated based on 40% of three months’ average trading profits, paid out in a single instalment and capped at £3,750.

The second grant will cover a three-month period from the start of February until the end of April 2021. The Government will review the level of this second grant and confirm this in due course.

Business grants

Business grants are to be expanded to cover companies in particularly affected sectors in high-alert level areas, helping them to stay afloat and protect jobs.

There is to be additional funding to support cash grants of up to £2,100 per month, primarily for those in hospitality, accommodation and leisure which may be adversely impacted by the restrictions.

These grants will be available retrospectively for areas who have already been subject to restrictions and are in addition to the higher levels of business support for Local Authorities moving into Tier 3, which, if scaled up across the country, would be worth more than £1billion.

It will be up to Local Authorities to determine which businesses are eligible for grant funding in their area and what precisely to allocate.

To find out more, contact your usual Champion adviser.

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