Tuesday, November 24, 2020

Chancellor increases financial support for businesses and workers

The government has announced it will increase its winter support schemes to ensure livelihoods and jobs across the UK continue to be protected in the difficult months to come.

In recognition of the challenging times ahead, the Chancellor said he would be increasing support through the existing Job Support and self-employed schemes, and expanding business grants to support companies in high-alert level areas.

This builds on agreements reached with Local Authorities moving to Alert Level very high, with extra support for businesses, jobs and the economic recovery.

Job Support Scheme (JSS)

Recognising the pressure businesses in some sectors and areas are facing, the announcement lightens the burden of keeping on staff.

When originally announced, the JSS – which will come into effect on November 1 – saw employers paying a third of their employees’ wages for hours not worked, and required employers to be working 33% of their normal hours.

The new announcement 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. That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.

Employers will continue to receive the £1,000 Job Retention Bonus. The Job Support Scheme Closed for businesses legally required to close remains unchanged.

Self-employed grant

The announcement increases the amount of profits covered by the two forthcoming self-employed grants from 20 per cent to 40 per cent, meaning the maximum grant will increase from £1,875 to £3,750.

This is a potential further £3.1bn of support to the self-employed through November to January, with a further grant to follow covering February to April.

Business Grants

The Chancellor has also announced approved additional funding 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 moving into Tier 3 which, if scaled up across the country, would be worth more than £1 billion.

These grants could benefit around 150,000 businesses in England, including hotels, restaurants, B&Bs and many more who aren’t legally required to close but have been adversely affected by local restrictions nonetheless.

Commenting on the Chancellor’s announcement of further support for businesses and jobs as Coronavirus restrictions increase, British Chambers of Commerce Director General Adam Marshall said: “This is a very significant improvement in the support available to businesses struggling with the impact of increasing restrictions across the UK.

“Chambers have been campaigning for greater support for businesses experiencing big falls in demand as a result of new restrictions, and a number of the steps announced today, including the lowering of employer contributions and the number of hours worked needed to qualify for the scheme, respond directly to our calls.

“Backdated grants for hospitality firms in tier two and enhanced grants for the self-employed will go some way to alleviating pressure on many of those who have been particularly vulnerable to the economic impact of the pandemic.

“Chambers have called for support to be truly commensurate with the restrictions imposed on businesses as part of our five tests for Coronavirus measures. The true test of these reforms will be whether they help businesses on the ground get through the difficult months ahead. Chambers of Commerce will continue to work with the Treasury to ensure that support is responsive and preserves businesses and livelihoods.”

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