At the end of last week, Chancellor Rishi Sunak made a series of announcements about changes to the UK government’s support schemes for jobs and businesses. There are some major changes, most of which will come into effect in November.
Job Support Scheme (JSS)
The scheme is to protect jobs in industries that are particularly struggling due to COVID e.g. entertainment, hospitality, etc. These updates replace the announcements made last week.
For all tier levels
- The new government support scheme starts on 1 November 2020, when the current furlough scheme ends
- The scheme will last for 6 months, with a review in 3 months (end Jan 2021)
- Businesses will be able to make their claims from December 2020.
The main changes:
- The employee now only needs to work 20% of the time (down from 33%) in order to be eligible.
- The employer now only contributes 5% of salary for hours not worked, down from 33% before.
For Tier 3 businesses only
For businesses that are legally required to close, the government will pay the full 67% of the employees’ wages where the employee cannot work for a week or more. These apply to those businesses based within the postcode of Tier 3.
Self-Employed Income Support Scheme
The government will now cover an average of 40% of lost profits. This is an increase from 20% previously.
This means that the maximum grant for the first three month grant period will increase from £1,875 to £3,750.
This grant is not retrospective and will apply from 1 November 2020.
Monthly government grants to businesses
Tier 2* – Any business in Tier 2 postcode that faces any type of restrictions e.g. hospitality, accommodation, and leisure, can now claim a monthly grant of up to £2,100 backdated to August.
These grants are allocated by the local authority who will distribute the funds
Whatever government support is appropriate for your business, there will inevitably be a tax and legal aspect to consider. That’s why it’s important to talk to your accountant to find out the comparative cost of each scheme and how they fit in with the business’s overall strategy. If you’re in need of advice or support in this or any other area, Paul Beare Ltd is right here for all your needs. You can contact us for help from tax and payroll to accounting and banking.