Chancellor enhanced financial support for businesses affected by COVID

Chancellor enhanced financial support for businesses affected by COVID poster

Chancellor announced increases in financial support for businesses yesterday to support businesses affected by COVID restrictions.

Sunak highlighted that the current three-tier approach to introducing lockdown measures was ‘the right way to control the spread of the virus’. However, he acknowledged that ‘even businesses which remain open face profound economic uncertainty.’

So far, enhanced support has only been on offer to those businesses placed in the highest level of alert, tier three.

Sunak said the government is making three changes to existing support schemes in response.

First, there is a new support scheme for businesses in tier two areas, with funding for local authorities to distribute grants in a flexible manner to those worst affected.

Every business premises will be eligible for up to £2,100 each month they are under tier two restrictions. And the payments are retrospective for any area which has been under these rules since August.

These grants could benefit around 150,000 businesses in England, including hotels, restaurants, B&Bs and others which are not legally required to close but have been adversely affected by local restrictions nonetheless.

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Second, for businesses which have not been legally required to close but which are suffering an impact from tier two restrictions, the JSS rules have been amended.

The government has reduced the minimum number of working hours from 33%  to 20%. So those working just one day a week will now be eligible.

The employer’s contribution to wage costs under the JSS for those not working is reduced from 33% to 5%, with the business based in all alert levels eligible.

Third, the government was doubling the self-employed income support scheme (SEISS) grant from 20% of previous earnings to 40%, to a maximum of £3750 per month.

Commenting on the changes, the Chancellor said:
‘I’ve always said that we must be ready to adapt our financial support as the situation evolves. These changes mean that our support will reach many more people and protect many more jobs.’I know that the introduction of further restrictions has left many people worried for themselves, their families and communities. I hope the government’s stepped-up support can be part of the country pulling together in the coming months.’Employers using the scheme can also claim the job retention bonus (JRB) for each employee. The employee, that meets the eligibility criteria of the JRB, which is worth £1,000 per employee.

There are two additional taxable SEISS grants, available to anyone who was previously eligible for the first and second SEISS grant and meets the eligibility criteria.

Authorities will pay grants in two lump sum instalments each covering three months. The first grant will cover a three-month period from the start of November 2020 until the end of January 2021.

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