Chancellor Rishi Sunak announces enhanced business support measures
The Chancellor Rishi Sunak yesterday outlined amended and enhanced business support measures to those previously announced in the Winter Statement. Key differences include:
Jobs Support Scheme
- Instead of a minimum requirement of paying 55% of wages for a third of hours, as announced last month, employers will have to pay for a minimum of 20% of usual hours worked, and 5% of hours not worked.
- The UK government will now fund 62% of the wages for hours not worked. This more than doubles the maximum payment to £1,541.75. In the most generous case, the taxpayer will now go from funding 22% of wages to just under half.
- The scheme will, as before, be open to all small businesses and larger businesses that can show an impact on revenues.
- It is aimed at addressing the gap in support for businesses in tier two restrictions, in England at this time, but is not explicitly tied to that status, and is available across the UK. (How the Scottish Government’s tiered levels of restrictions will align with that in England remains to be seen.)
- The announcement also reduces the employer contribution to those unworked hours to just 5%, and reduces the minimum hours requirements to 20%, so those working just one day a week will be eligible.
- Employers will continue to receive the £1,000 Job Retention Bonus.
- The Chancellor has also announced approved additional funding for councils in England to support cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert level areas.
- These grants will be available retrospectively for areas who have already been subject to restrictions, and come on top of higher levels of additional business support for Local Authorities in England moving into Tier 3 and can be backdated to August 2020.
- The Chancellor stated that the devolved nations will be given the equivalent funding, under the Barnett Formula.
Self-Employed Income Support Scheme (SEISS)
- The UK government will provide two additional taxable SEISS grants to support those experiencing reduced demand due to COVID-19 but are continuing to trade, or temporarily cannot trade.
- These will be available to anyone who was previously eligible for the SEISS grant one and grant two, and meets the eligibility criteria.
- The amended grant scheme increases the amount of profits covered by the two a from 20 per cent to 40 per cent, additional tranches meaning the maximum grant will increase from £1,875 to £3,750.
- Grants will be paid in two lump sum instalments each covering 3 months.
- The first grant will cover a three-month period from the start of November 2020 until the end of January 2021. The government will pay a taxable grant which is calculated based on 40% of three months’ average trading profits, paid out in a single instalment and capped at £3,750.
- The second grant will cover a three-month period from the start of February until the end of April 2021. The UK government will review the level of the second grant and set this in due course.