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Plan for Jobs: Chancellor increases financial support for businesses and workers

Posted by Crunch Accountants on Oct 22nd, 2020 | Get paid

Chancellor increases financial support for businesses and workers | Crunch

On 22nd October 2020 the Chancellor announced a Plan for Jobs as part of the government’s Coronavirus response, building on his previously announced Winter Economic Plan and 9th October updates to the plan. The measures include the expansion of the Job Support Scheme (JSS) to help firms required to close due to Covid-19 restrictions. These measures will primarily benefit the hospitality, accommodation and leisure sectors. He also announced increased support to those eligible for the Self-Employed Income Support Scheme.

On 9th October 2020 the Chancellor announced that under the Job Support Scheme expansion, firms whose premises are legally required to shut for some period over winter as part of local or national restrictions will receive grants to pay the wages of staff who cannot work. This type of support will be called JSS Closed.

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.

Employers will not be required to contribute towards wages but must cover their National Insurance Contributions and their pension auto-enrolment contributions under the expanded scheme.

Businesses will only be eligible to claim the grant while they are subject to Tier 3 restrictions and employees must be off work for a minimum of seven consecutive days. The expanded scheme will begin on 1st 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 8th December 2020. Employees of firms that have been legally closed in the period before 1st November are eligible for the Coronavirus Job Retention Scheme, provided they had previously been furloughed.

22nd October announcement

On 22nd October 2020, the Chancellor announced a further expansion of the JSS to cover businesses that remain open, but are experiencing reduced demand or are in difficulty due to the increased restrictions. It’s hoped the expansion will allow businesses to keep staff on and the government will increase its contribution to wage costs to help with this. This will be called JSS Open.

The announcement reduces the employer contribution required for any hours an employee does not work to just 5%, and reduces the minimum hours that an employee is required to work to just 20% of normal hours (down from 33%), so those working just one day a week will be eligible. That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer will pay wages of £44.

Self-Employed Income Support Scheme

The Self-Employed Income Support Scheme (SEISS) has been updated and the proportion of profits covered by the forthcoming self-employed grant in for the period 1st November 2020 to 31st January 2021 increases from 20% to 40% of average monthly trading profits, meaning the maximum grant will increase from £1,875 to £3,750.

The SEISS operates as follows:

  • The government will provide two further taxable SEISS grants to support those experiencing reduced demand due to COVID-19 but are continuing to trade, or temporarily cannot trade
  • It will be available to anyone who was previously eligible for the SEISS grant one and grant two, and continues to meet the current eligibility criteria
  • You do not have to have received a grant in tranche 1 or tranche 2 in order to be eligible, but you must meet all the current eligibility criteria
  • Future grants will be paid in two lump sum instalments each covering 3 months. The third grant will cover a three-month period from the start of November 2020 until the end of January 2021. The government will pay a taxable grant which is calculated based on 40% of three months’ average trading profits, paid out in a single instalment and capped at £3,750
  • The fourth grant will cover a three-month period from the start of February until the end of April 2021. The government will review the level of the fourth grant and set this in due course.

Business Grants

The Chancellor announced additional funding to support cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert (Tier 2) level areas. These grants will be available retrospectively for areas who have already been subject to restrictions. Local Authorities will distribute the grants.

We will keep this article and our COVID-19 Hub up to date with all the latest updates as they happen.

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