UPDATE: More Support For Businesses In Lockdown

It’s the question on everyone’s lips – what will happen to businesses in Local Lockdowns?

Many of our clients are in highly affected areas, and almost all of them argue that there isn’t enough support for businesses that are forced to close in local lockdowns.

However the Chancellor Rishi Sunak has retracted his previous furlough scheme, and has offered new support to businesses in these highly affected areas. 


The Job Support Scheme For Closed Businesses

The new ‘safety net’ furlough scheme is designed for businesses that are forced to close due to Local Lockdowns.

If a business is in this scenario, then their employees will get 2/3rds of their wages covered by the government (up to a maximum of £2,100).

Businesses will only qualify if they are legally forced to close under the new lockdown measures, which the Prime Minister will announce next week.

These new measures will likely be a 3-tiered system, where parts of the country are placed in different tiers, with different restrictions.

The highest tier (which looks set to hit areas in the North West and North East) will order pubs, bars, restaurants, and cafés to close their doors, in order to stop the spread of coronavirus.


Cash Grants Have Also Been Increased

The Chancellor has also announced that higher cash grants will be available to businesses who are forced to close their doors.

Sunak had previously revealed that businesses would receive a maximum of £1,500 every 3 weeks to support them through those tough times.

This has now been increased to a maximum of £3,000 which wee given out every 2 weeks.

Mr Sunak declared: ‘I hope this provides reassurance, and a safety net for people and businesses in advance of what may be a difficult winter.’


More Financial Pressure On The UK…

Rishi Sunak has always promised that the Treasury would adapt their response, as the coronavirus situation developed across the country.

Many are now worried that this extra support will put more financial pressure on the country, and more job losses in the long term will come as a result.

The Treasury couldn’t confirm the cost of the Job Support Scheme for Closed Businesses. This is due to different areas of the country being put into local lockdowns for unknown periods of time.

The Treasury did confirm this though: In most scenarios they were expecting to pay out hundreds of millions every month.


A Summary Of The New Support

 

Here’s a quick summary of the new Job Support Scheme:

  • Workers at businesses that are legally forced to close due to coronavirus restrictions will receive 2/3rds (or 67%) of their salary under the expanded job support scheme.
  • This amount will be paid by the Treasury, and be capped at £2100 per worker.
  • Employers will only be required to pay National Insurance and Pension Contributions.

 

Here’s a quick summary of who is eligible for the new support:

  • Businesses can claim the grant if they are placed under the highest tier of local lockdown restrictions.

  • Eligible employees must have been off work for at least seven consecutive days.
  • Employees must also have been on the PAYE payroll from September 23rd 2020.

When Does The New Scheme Launch?

The Job Support Scheme for Closed Businesses officially launches on November 1st. It will run for six months, but there will be a review in January 2021.

This date coincides with the end of the original furlough scheme, which concludes at the end of October.

This initial scheme, when it was most in demand, saw the government pay 80% of workers wages.

 

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