Oct 24, 2020 | Covid19, Tax

Support Measures Update

On the 22nd October, the Chancellor, Rishi Sunak, announced the Winter Economy plan, there have been some key changes to the government support in the following
areas which we wanted to highlight for you in the details below:

– Extended Job Support Scheme
– SEISS grants
– Business Grants

Extended Job Support Scheme

The Job Support Scheme (JSS), the next phase of UK government support for business and employment during the COVID pandemic, starts on 1 November 2020.

Job Support Scheme Open

The Chancellor’s announcement means that the scheme for businesses that remain open will require less financial input from employers and employees will be eligible for support while working fewer hours than were originally envisaged when the JSS was announced on 24 September 2020.

The key changes are:

the employer contribution to the wage cost of unworked hours is reduced to 5%, and
the minimum number of hours the employee will have to work is reduced to 20%, rather than 33%,
so those working just one day a week will now be eligible.

This means the Government will now cover 62% of the wages of employees while they are away from work.


Jane works five days a week and earns £400. Following discussion, she agrees to accept short-time working of one days per week (20%) and her employment contract is revised to reflect this. Her employer is using the Job Support Scheme.

Employer cost HMRC cost Total paid Unpaid
Time worked £400 @20% £80 £80 £80
Time not worked £400 @80% £320 £16 £197 £213 £107
£96 £197 £293 £107


Job Suport Scheme Closed

The Job Support Scheme Closed, for businesses legally required to close, remains unchanged.

Each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month, although employers have the discretion to pay more than this if they wish. This will help protect employee incomes, limit unemployment and retain employer-employee matches so that these premises are able to reopen as quickly as possible when circumstances allow.

 Job Retention Bonus

Employers will continue to receive the £1,000 Job Retention Bonus, where eligible:

you made an eligible claim for under the Coronavirus Job Retention Scheme
you kept continuously employed from the end of the claim period of your last Coronavirus Job Retention Scheme claim for them, until 31 January 2021
are not serving a contractual or statutory notice period for you on 31 January 2021 (this includes people serving notice of retirement)
you paid enough to meet the minimum income threshold of £1560 gross pay in total across the tax months ending 5th December 2020, 5th Jnauary 2021 and 5th February 2021.

SEISS Grants

The level of the third grant, for the period 1st November 2020 to 31st Janaury 2021, will be based on 40% of average trading profits, rather than the previously announced 20%, and will now be capped at £3,750.

Businesses temporarily unable to trade due to coronavirus were to be excluded from claiming the third and fourth grants but will now be eligible.

It remains the case that claimants must have been previously eligible for the first and second grant (although they do not have to have claimed the previous grants) and must declare that they intend to continue to trade and either:

are currently actively trading but are impacted by reduced demand due to coronavirus, or
were previously trading but are temporarily unable to do so due to coronavirus.

The scheme has not been extended to businesses that were not eligible for the first and second grants and information from 2019/20 returns will not be taken into account.
The level of the fourth grant for the period 1st February 2021 to 30th April 2021 is to be kept under review and announced in due course.

Business Grants

The Chancellor has also announced approved additional funding to support cash grants for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert level areas.

The grants will be made available through local authorities and will be made available to support businesses in high-alert level areas which are not legally closed, but which are severely impacted by the restrictions on socialising. The funding Local Authorities will receive will be based on the number of hospitality, hotel, B&B, and leisure businesses in their area.

Local Authorities will receive what will be the equivalent of;

– For properties with a rateable value of £15,000 or under, grants of £934 per month.
– For properties with a rateable value over £15,000 and below £51,000, grants of £1,400 per month.
– For properties with a rateable value of exactly £51,000 and over, grants of £2,100 per month.

It will be up to Local Authorities to determine what precise funding to allocate to each business – the above levels are only an approximate guide.
Local Authorities will also receive a 5% top up amount to these implied grant amounts to cover other businesses that might be affected by the local restrictions, but which do not neatly fit into these categories.

If your business has had to legally closed, you may be eligible for a grant of £3,000. This will also be made available through your local authority.
Businesses are likely to need to apply to their local authority for support and we expect more details to be released in relation to the application process in due course.

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