Govt to cover up to 95% of wage costs under new support scheme
UK chancellor Rishi Sunak has announced changes to the jobs and businesses financial support scheme.
Sunak confirmed that extra help will be provided for businesses to maintain staff as an increase will be made wage costs under the Job Support Scheme.
As well as reducing the employer contribution towards unworked employee hours to just 5%, the changes reduce the minimum hours requirements to 20%, so those working just one day a week will be eligible.
So if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.
Employers using the scheme will also be able to claim the Job Retention Bonus (JRB) for each employee that meets the eligibility criteria. This is worth £1,000 per employee and means an employer (under the Job Support Scheme-Open) could receive over 95% of the total wage costs of their employees if they are retained until February.
In addition, businesses in the hospitality, accommodation and leisure sectors will receive an increased grant of up to £2,100 a month particularly if they are impacted by restrictions in the high-tier areas.
The grant will be made available for hotels, restaurants and B&Bs in areas that have already been subject to restrictions in the high-alert tiers but which remain open such as London, Essex, Cumbria, Derbyshire, Surrey, York, Cheshire, Derbyshire and West Yorkshire. You can find out what tier your area falls under using the Gov.uk postcode checker.
“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,” said Sunak.
Along with these changes, local authorities will also receive funding to support the relevant businesses. Self-employed workers will also receive grants of up to 40% of previous earnings.
- Properties with a rateable value of £15,000 will receive grants of £934 a month, properties with a value over £15,000 and under £51,000 will get grants of £1,400 a month and for properties with a value of £51,000 and over, grants of £2,100 a month will be applied.
- Self-employed workers will receive two taxable SEISS (Self-Employment Income Support Scheme) grants which will be paid in two lump sums to each cover three months.
- The maximum grant for self-employed will increase from £1,875 to £3,750. That’s a further £3.1 billion of funding from November to January, with a further grant to cover February to April.
“This is a welcome intervention which will help protect more jobs and small businesses, as well as self-employed traders, through the difficult winter months. Measures to combat Covid-19 make this a tough time for many small businesses, but we are determined to make it through. These measures will help make that happen,” said Mike Cherry OBE, national chairman of the Federation of Small Business.
An additional 5% top up amount will also be given to local authorities to support businesses within these areas but may not fit into the above categories. They will decide which businesses are eligible for grant funding.
“I’ve always said that we must be ready to adapt our financial support as the situation evolves, and that is what we are doing today. These changes mean that our support will reach many more people and protect many more jobs,” Sunak said.
Also, find out more about the government’s Covid-19 support package for startups.