Autumn 2020 Business Support Guide – updated 26.10.20
The Chancellor’s Winter Economic Plan
Chancellor Sunak received widespread praise for his business support measures introduced following the onset of the coronavirus pandemic. Many businesses and individuals have benefited from a range of schemes, including furlough grants for staff unable to work, grants for the self-employed, deferral of VAT and Income Tax payments and cheap, government-backed business loans.
With the second wave of coronavirus infections upon us, many areas of the UK are entering a form of lockdown, forcing some businesses to close partially or completely. To help these businesses survive, the Chancellor has introduced two forms of Job Support Scheme: JSS Open and JSS Closed, both of which start from 1 November 2020.
The JSS Open requires the employee to work at least 20% of their normal hours, but government will fund 61.67% of the remaining hours when they are not working, capped at £1,541.75 per month. The employer will bear the cost of 5% of the value of the employees’ furloughed time (capped at £125 per month) plus the employer’s National Insurance Contributions (NIC) and minimum pension contributions on all the wages paid.
The JSS Closed only covers situations where the business has been legally required to close its premises to customers due to coronavirus regulations. The employee will receive two-thirds of their normal pay, funded by the government, subject to a cap of £2,083.33 per month. The employer must pay employer’s NIC and pension contributions due on those wages.
Businesses in the hospitality and leisure sectors, which have been adversely affected by coronavirus, can also apply for cash grants from their local authority of up to £3,000 per month, where the premises is required to close.
In addition, under the Job Retention Bonus, employers will be able to apply for a £1,000 per head bonus for each staff member who was previously furloughed, if they continue to employ them from 31 October to 31 January 2021 and pay them an average of at least £520 per month over this period.
Employers will also be able to use the Kickstart Scheme to give young people six months’ government-paid work experience.
There are to be further grants for the self-employed. For those who qualified, the first two grants were based on 80% and 70% of previously reported profits, but the third grant will be based on 40% of profits.
Details of the fourth grant have not yet been announced.
Further VAT and Income Tax deferrals will also be available in 2021, to help the cashflow of businesses and individuals.
In this newsletter we explain what has been announced so far on
these new business support measures.
Download the full guide here.