Further support for businesses and workers announced by Rishi Sunak
22 October 2020
Chancellor of the Exchequer, Rishi Sunak, unveiled a series of additional measures designed to help both businesses and workers through the prolonged period of turbulence posed by coronavirus, as additional lockdown measures are implemented.
Speaking in Parliament, he said:
“I’ve always said that we must be ready to adapt our financial support as the situation evolves, and that is what we are doing today. These changes mean that our support will reach many more people and protect many more jobs
I know that the introduction of further restrictions has left many people worried for themselves, their families and communities. I hope the government’s stepped-up support can be part of the country pulling together in the coming months.”
Further extension to the Job Support Scheme
Businesses which are allowed to remain open but that are still experiencing substantial difficulty, will be provided with additional support to enable them to keep staff on, avoiding redundancies.
The further extension to the Job Support Scheme (JSS), which is now being referred to as the ‘Job Support Scheme – open’ will mean that, as opposed to having to work 33% of their normal hours, employees will only be required to work a minimum of 20% of their usual working hours. In addition to this, employers will only have to pay for 5% of the amount for hours not worked, instead of the originally announced 33%.
The government will provide up to a maximum of 61.67% of wages for usual hours not worked, and this will be up to a cap of £1,541.75 per month. An example is provided:
A full-time employee in the hospitality sector is paid an average of £1,100 per month. Under the Job Support Scheme – open, they will still collect at least £807 per month. The employer is only required to pay a total of £283 in the month, and the Government will pay the remainder.
Employers are still able to receive the Job Retention Bonus (JRB) of £1,000 per eligible employee whilst utilising this scheme.
Employers that are legally required to close will be eligible for the ‘Job Support Scheme – closed’, and the details of that scheme remain unchanged.
Increased Self-Employment Income Support Scheme grants
The Chancellor also announced that the amount of profits covered by the upcoming, third Self-Employment Income Support Scheme (SEISS) grant will double from 20% to 40%, and this will mean that the maximum amount of the grant will rise from £1,875 to £3,750. This will be in relation to the period from November 2020 – January 2021.
This grant, and an additional grant that will cover the period from February 2021 – April 2021, will be available to those who are experiencing reduced demand due to coronavirus, and that meet certain eligibility criteria. The grants will be paid in two lump sum instalments, each of which cover a three-month period.
Business grants have been expanded to help businesses in the most seriously impacted sectors in areas that are classed as being high alert. The cash grants will be for amounts of up to £2,100 per month, and are primarily intended for businesses in the hospitality, accommodation, and leisure sectors.
It is anticipated that these payments could help approximately 150,000 businesses in England, who have not been legally instructed to close but nevertheless have been adversely affected by local restrictions, put in place due to coronavirus.
Guidance on the Job Support Scheme, both open and closed, has not yet been released. This guidance is essential because, as always with payroll policies, the devil is in the detail. The CIPP continues to lobby HMRC, and as soon as guidance is made available, we will alert members via News Online and on our social media platforms.
The information in this article is accurate at the time of publication. For all the latest information, news and resources on how the COVID-19 pandemic is affecting payroll professions, visit our Coronavirus hub.