Chancellor expands Job Support Scheme and grants to businesses facing new COVID-19 restrictions - Palmers Solicitors

Chancellor expands Job Support Scheme and grants to businesses facing new COVID-19 restrictions

Chancellor expands Job Support Scheme and grants to businesses facing new COVID-19 restrictions

The Chancellor has announced that the Government will expand the new Job Support Scheme (JSS) to assist jobs and businesses required to close their doors as a result of tougher Coronavirus restrictions.

These new restrictions have been outlined in a new three tier system outlined by the Prime Minister in an announcement made on 12 October 2020.

The new three-tier lockdown system

To help prevent the spread of disease across the UK, the Government has introduced three different levels of lockdown for areas depending on the recorded rate of infection in each region.

The least severe tier is ‘Medium’ and in these areas 10pm curfew for bars, pubs and restaurants will be in place and gatherings of more than six people banned, apart from some settings such as funerals and weddings.

All businesses and venues can continue to operate, in a Covid-secure manner, other than those that remain closed in law, such as nightclubs and adult entertainment venues. This applies to all but the specified businesses in the top tier.

The next tier is ‘High’. In these areas mixing of households indoors is forbidden and only two households can meet in a private garden. The rule of six and social distancing rules also apply. Pubs and restaurants may remain open, but the 10pm curfew remains in place.

The final and most severe level of restriction is ‘Very High’. In these areas, no mixing of households is permitted indoors and outdoors, including in private gardens. The Rule of Six applies in open public spaces like parks and beaches.

Pubs and bars will be required to close, although restaurants, and pubs that can operate as restaurants, will be allowed to stay open. This means pubs must serve substantial meals, like a main lunchtime or evening meal and may only serve alcohol as part of such a meal. The 10pm curfew will also remain in place for these venues.

Local authorities will also be given discretionary powers to close gyms, betting shops, casinos, hairdressers and beauty salons, where they deem it necessary.

People living in these areas will also be told to avoid all non-essential travel to and from ‘Very High’ areas, other than for activities like work, education and caring responsibilities.

Within all the tiers non-essential retail, schools and universities will be allowed to remain open.

As with the current rules, businesses and venues selling food for consumption off the premises can continue to do so after 10pm as long as this is through delivery service, click-and-collect or drive-thru.

The expanded Job Support Scheme

Under the expanded JSS, firms whose premises are legally required to shut for some period over winter as part of local or national restrictions will receive grants to pay the wages of staff who cannot work.

These grants will cover around two-thirds of each employees’ salary (67 per cent), up to a maximum of £2,100 a month.

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.

Businesses can only claim a grant where they are subject to a restriction that prevents them from opening and employees must not work for a minimum of seven consecutive days to be eligible.

The new scheme will open on 1 November alongside the other JSS measures announced last month in the Winter Economy Plan. It will be available for up to six months for businesses affected, with a review point in January.

All grant payments will be made in arrears through a dedicated HM Revenue & Customs service, which will be available from early December.

Lockdown grants

As well as expanding the JSS, the Government will also increase the value of cash grants offered to businesses in England forced into lockdown to support them with fixed costs.

Linked to the rateable value of business premises, the increased grants will see payments of up to £3,000 per month, payable every two weeks, instead of up to £1,500 every three weeks.

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; and
  • larger businesses can claim £3,000.

The Government is also extending this scheme to include businesses that are forced to close on a national basis, such as nightclubs.

Here to help 

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.

With this being the case, it is important to consider how this affects your business and seek advice at the earliest opportunity. To find out how we can assist you, please contact us.