COVID-19: Further government support measures announced

read timeRead time: 2 mins
The Chancellor has unveiled the latest strand to the government’s Coronavirus-related support package, which is designed to help those businesses worst affected by the economic impact of the lockdown restrictions.

The basic version of the JSS (since dubbed the ‘Job Support Scheme Open’) announced on 24 September – under which an employee works one third of their normal hours and the government and the employer then top up – was designed to provide a base level of support for businesses across the country, including those in Tier 1 (medium) areas.

The expanded JSS (the ‘Job Support Scheme Closed’) announced on 9 October – under which employees in UK businesses that are required to shut due to the government’s lockdown restrictions will receive two-thirds of their normal pay from the government (with no contribution, other than funding NIC and pension contributions, from the employer) – was targeted specifically at Tier 3 (very high) areas.

The latest package of measures, announced today, seeks to plug the gap and support those businesses that are ‘open but struggling’ in Tier 2 (high) areas – although there are also changes that affect businesses and individuals in all tiers.

The Chancellor announced three main initiatives:

A new grant scheme has been introduced primarily for businesses in the hospitality, leisure and accommodation sectors in Tier 2 areas.  The aim is to support businesses such as restaurants, hotels and B&Bs that are seeing a reduction in revenue as a result of the ban on households mixing indoors in Tier 2 locations.

The scheme, under which grants will be distributed by local authorities, is funded to allow cash payments of up to £2,100 to each qualifying business for every month in which it is affected by Tier 2 restrictions.  Importantly, these grants can be backdated to August.

The Chancellor also took the opportunity to make the JSS for open businesses more accessible and generous.  Employees now need to work for 20% rather than 33% of their normal hours to qualify.  The employer contribution for the hours not worked has been reduced to 5%, with the difference made up by government.  This means that the government will now fund up to 62% of the wages for hours not worked, up to £1,541.75 per month. These changes will be applied to everyone covered by the Scheme, across all alert levels.

Finally, the Chancellor has increased support for the self-employed.  The next round of the Self Employed Income Support Scheme will double the amount available to recipients from 20% to 40% of previous profits, up to a maximum of £3,750 per month. There will be two further grant payments, covering the three months from November to January and February to April.