We’ve reached the end of October and I think many of us were hoping things would be getting a bit more back to normal by now. But in fact, it feels like things are changing more quickly and dramatically than they did in the spring as the full impact of the pandemic is revealed.
New Job Support Scheme and Tier 2 grants
At the end of the summer, the Chancellor announced that the Coronavirus Job Retention Scheme would be replaced by the Job Support Scheme which was designed to work in an environment where businesses were reopening, restrictions lifting and things getting back to normal. However, as we have seen over the last few weeks, that is now not the case and some areas of the country are going back into tight restrictions to deal with rising infection rates.
So on Thursday, he announced some changes to the scheme, making it more generous for businesses in areas under the newly introduced Tier 2 and 3 restrictions.
Businesses in Tier 3 areas which are forced to close will now have 66.67% their employees’ pay covered and with no expectation that employers make any contribution.
For businesses in Tier 2 and Tier 1, an employee will only need to work 20% of their normal hours (and be paid for those hours in the normal way), the employer will cover a further 5% and the government will pay 61.67%.
In addition, hospitality and leisure businesses in Tier 2 – which will not be forced to close but which will be seeing reduced income – will be able to apply for grants of up to £2,100 which will be distributed by their local authority.
Job Retention Bonus
The Job Retention Bonus Scheme was first announced earlier in the summer and allows employers to claim £1,000 for every eligible employee who has been placed on furlough but who remains continuously employed until at least 31st January 2021. The grant is paid to the employer and there is no requirement for them to pass it on to their employee.
The qualifying earning period starts on 6th November so if you want to claim a grant, your employee must be back at work by then.
Self Employed Income Support Scheme
In the summer, the Chancellor also announced a further extension to the SEISS although only 20% of profits would be paid as a grant. This week, that has been increased to 40% so more generous and more in line with the Job Support Scheme. We are awaiting more details on the scheme and it is not yet open for applications.
Things are changing quite quickly at the moment, but our membership of the Chartered Institute of Payroll Professionals means we get notified quickly of any changes and updates to government financial support schemes and other support measures that might be available to businesses during the pandemic. Keep an eye on our Facebook page (we’d love it if you’d like us there too) for all the up to date info.