Financial Support Increased for 'Plan for Jobs'

Date: 23/10/20

Financial Support Increased for 'Plan for Jobs'

The Chancellor, Rishi Sunak, has announced that financial support made available for businesses will be increased. The increased funding will be made available for current support schemes such as the Job Support Scheme, Self-employment Income Support Scheme and other Coronavirus Business grants.

 

The Job Support Scheme (JSS)

There are now two variations of this scheme, one if you are still open but are facing reduced demand and a separate scheme if you are legally required to shut due to lockdown restrictions set by one of the four governments. These are aptly called JSS – Open and JSS – Closed. Claims for JSS will be able to be made from 8 December for pay periods ending and paid in November.

The employer must pay Employer National Insurance Contributions (NICs) and Pension Contributions due on the total amount paid to the employee, including any amounts met by a scheme grant.

Employers using the JSS will also be able to claim the Job Retention Bonus (JRB) for each eligible employee, worth £1,000 per employee. More information available HERE.

 

(a) JSS – Open

It was announced at the end of last month, in the ‘Plan for Jobs’, that the Job Support Scheme would take over from the Coronavirus Job Retention Scheme (CJRS) from 1 November 2020 and would contribute towards employees’ wages who worked at least 33% of their usual hours. The JSS originally required employers to pay for any hours that an employee worked plus 33.33% of the hours which they did not work with the government then also paying 33.33% of the hours not worked.

This has now changed so that employees are now only required to work a minimum of 20% of their usual hours, which are payable by the employer. For the remaining hours not worked the employee will be paid 66.67% of their normal pay, of which the employer will pay 5%, up to a maximum of £125 per month, and the government will pay the remainder of the 61.67%, up to a maximum of £1,541.75 per month. This means employees will continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.

 

(b) JSS – Closed

For businesses who are legally required to close due to lockdown restrictions set by one of the four governments, funding has already been announced which will fund two-thirds of employee wages, up to £2,083.33 per employee per month. This will run in line with the rest of JSS and will therefore have the same eligibility criteria.

For further information about the JSS, see the Policy Paper HERE.

 

Self-Employment Income Support Scheme (SEISS)

The SEISS Extension Grant will support self-employed individuals who are experiencing reduced trade or are not able to temporarily trade. The grants covering the 6-month period from November 2020 to April 2021 were originally only going to be payable based on 20% of three months’ average trading profits, capped at £1,875. This has now changed and the first grant covering the 3-month period from November 2020 to January 2021 will be payable based on 40% of three months’ average trading profits, capped at £3,750. The level of the second grant covering February to April 2021 will be reviewed closer to the time.

 

Other Business Grants

Additional funding has been provided to local authorities to support businesses in high-alert level (Tier 2) areas that are not legally closed but are severely impacted by the restrictions on socialising. 

The funding amount will be payable based on the business properties rateable value:

  • A rateable value of £15,000 or under - £934 per month.
  • A rateable value of over £15,000 and below £51,000 - £1,400 per month.
  • A rateable value of £51,000 and over - £2,100 per month.

Local Authorities are also being provided with funding to cover other businesses that might be affected by local restrictions, but which do not fit into these categories. It will be down to local authorities to decide which businesses are eligible for funding in their local areas.

Businesses in Very High (Tier 3) alert level areas will qualify for up to £3,000 per month whether closed or open.


Tim Preece FCCA

Author: Tim Preece FCCA

A former pupil at Lancaster Royal Grammar School, Tim joined Scott & Wilkinson in 1992 as a trainee after completing a degree in Maths and Economics at Leeds University and qualified as an Accountant in 1996. Tim was...

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