New business support announced for businesses told to legally close in further lockdowns by Rishi Sunak
New business support announced for businesses told to legally close in further lockdowns
Extended Coronavirus Job Support Scheme
The government’s Job Support Scheme (JSS) will be expanded to protect jobs and support businesses legally required to close their doors as a result of local or national restrictions. Businesses will receive grants to pay the wages of staff who cannot work - protecting jobs and enabling businesses to reopen quickly once restrictions are lifted. The Government
will support eligible businesses by paying two thirds of each employees’ salary (or 67%), up to a maximum of £2,100 a month.
Under the scheme, employers will not be required to contribute towards wages and only asked to cover NICS and pension contributions. Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of 7 consecutive days. The scheme will begin on 1 November and will be available for six months, with a review point in January. In line with the rest of the JSS, payments to businesses will be made in arrears, via a HMRC claims service that will be available from early December. Employees of firms that have been legally closed in the period before 1 November are eligible for the CJRS.
Cash grants for businesses
The government is increasing the cash grants to businesses in England shut in local lockdowns to support with fixed costs. These grants will be linked to rateable values, with up to £3,000 per month payable every two weeks, compared to the up to £1,500 every three weeks which was available previously. This could benefit hundreds of thousands of businesses, including restaurants, pubs, nightclubs, bowling alleys and many more.
The Chamber will update with further details of these schemes once released by government, including whether there will be additional support for the self-employed.
Previous support announced in the in the Winter Economy Plan
New job support scheme
- Allows employers to keep workers in roles on shorter hours
- Employees need to work and be paid for at least a third of their usual hours
- The Government will then cover another third so employees will receive 2/3 of their pay
- The level of grant will be based on the employee’s salary capped at £697.92 per month
- All SMEs are eligible larger businesses will need to prove a reduction in turnover
- This scheme will be open to firms who haven’t previously used the furlough scheme
- Businesses brining people back from furlough will also be eligible for the job retention bonus
- Businesses will not be able to issue redundancy notices to employees on the Scheme throughout its duration
This scheme will help to retrain jobs in the region, but this scheme will not cover people on zero-hour contracts or those without regular hours. Heavily impacted sectors such as arts and tourism are also still unable to operate due to public health restrictions which prevent people returning to work. This scheme will provide limited support to those unable to return to a third of their usual hours.
Pay as you grow
- More time and flexibility to pay back bounce back loans over 6-10 years and the option to suspend repayments for up to 3 months without impacting credit scores
- For SMEs using the coronavirus business interruption loans there will be a Government guarantee of up to 10 years to give firms longer to repay loans
- A successor to the loan guarantee scheme will be announced in January
Self-employment income support scheme
- The Government is extending the self-employed grant until 30th April 2021
- An initial taxable grant will be paid to cover 3 months' worth of profits for the period Nov to Jan next year up to a total of £1875.
- An additional grant will be paid for Feb to Apr 2021
Tourism and hospitality
- The Government is cancelling a planned increase in VAT from 5 to 20%, and is keeping a lower rate of VAT of 5% for hospitality and leisure firms until the 31st March 20221
Self-assessed income tax
- Self-assessed income tax bills can be spread out over 12 months
- Businesses who deferred their VAT will not have to repay this in a lump sum at the end of March. They will have the option of a re-payment plan. The VAT total can be split into interest-free payments over 11 months.
We recognise that cashflow is a large issue for businesses so helping businesses to repay loans will be beneficial.
However, there is a lack of support for start-ups and encouraging newly formed businesses in these measures who will be crucial for the recovery.
Support for businesses to retrain staff especially around digital sills is still needed as many businesses move more online.
We still need to see funding and support for local testing to ensure we have a functioning track and testing system in the region .In order for the education, health and private sector to recover we need local access to quick and accurate tests.