The Government has announced a series of new financial support measures to help businesses or sectors that are forced to shut due to local or national lockdowns.
Employees who work for UK firms forced to shut by law because of coronavirus restrictions are to get two-thirds of their wages paid for by the government. The scheme, announced by Rishi Sunak, begins on 1st November for six months, however, it will only apply to businesses told to close (local lockdowns) rather than those who choose to shut because of the broader impact of Covid restrictions.
The grants will be paid up to a maximum of £2,100 per employee a month and the Treasury said they would protect jobs and enable businesses to reopen quickly once restrictions are lifted. Employers will not be required to contribute towards wages and will only be asked to pay National Insurance contributions (NICs) and auto-enrolment pension contributions. The Government has estimated that around half of potential claims are not likely to incur employer NICs or pension contributions at all. The support will be reviewed in January.
Until November businesses that are asked to close can continue to use the existing furlough scheme and then move onto the Job Support Scheme to top up staff wages who have not been able to return to work full time. It was stressed that the furlough scheme cannot continue. There are millions of employees that are now working part time hours and being paid the remainder through the flexible furlough scheme.
It’s very likely that some of you will need access to these schemes for your employees now that the new tiered system has been introduced. Speaking on television on Monday night, Mr Johnson explained how different places would be put into three different tiers. It means areas where there is a higher risk of catching the virus will face extra rules to keep people safe. Please speak to one of our specialists in our payroll department to ensure you have all the right paperwork ready to enrol your employees in these schemes.
To try and save millions of jobs with the furlough coming to an end on 31st October, Rushi Sunak has set a new job support scheme. Employees must work at least a third of their normal hours and the government and the employer will then be topping up the remainder of their wages. The government are going to pay the remaining two thirds (22 % of the wages) and the employer will then have to pay the remaining third to be able to qualify for the help.
The support from the government is capped at £697.92 per month. If you currently have employees working a third of their normal hours will get 77% of their normal wages. This scheme is due to open on 1st November and can be used by employers who have not used the old furlough scheme before. You will also still be able to claim the £1000 job retention in the new year. To find out more, read our article HERE
As well as expanding the Job Support Scheme, the Government will also increase the value of cash grants offered to businesses in England forced into local lockdowns in order to support them with fixed costs. We previously stated that businesses required to close would receive grants up to £1,500 every three weeks. This has now been updated by the government up to £3,000 per month.
Under this reformed grant scheme:
- Small businesses with a rateable value of or below £15,000 can now claim £1,300 per month
- Medium-sized businesses with a rateable value between £15,000 and £51,000 can claim £2,000 per month
- Larger businesses can claim £3,000
- Local authorities will be responsible for distributing the grants to businesses in circumstances where they are closed due to local interventions
- Further eligibility criteria may be determined by Local authorities
- As with other Covid business grants, local grants to closed businesses will be treated as taxable income
- The UK Government has guaranteed that the devolved administrations will receive at least £12.7 billion on top of their March Budget settlements to help them with their response to Covid-19 this year, with £6.5 billion for the Scottish Government, £4.0 billion for the Welsh Government and £2.2 billion for the Northern Ireland Executive. The Barnett formula will apply in the usual way to any additional funding provided to departments in relation to this intervention.
The Government is also extending this scheme to include businesses that are forced to close on a national basis, such as nightclubs. Much of these new measures will rely on the Government’s new tiered system for restrictions and may vary over time from one region to the next. This targeted support is in addition to business eligibility for the government’s existing schemes of support to businesses which remain available to impacted companies. This includes CBILS, government backed loans and business grants worth up to £25,000 per property.
With this being the case, it is important to consider how this affects your business and seek advice at the earliest opportunity. Both the government and banks will need all of your paperwork to be up to date and in order to consider you for any loans or grants. Make sure that you have sent everything in to us, in order and on time so that we can assist you with the best deals. Contact us today for further information on this grant on 02085300720 or email firstname.lastname@example.org