COVID Job Support Scheme Enhanced To Match New Restrictions
And SEISS has been increased too ...
Posted by Roger Eddowes on 26/10/2020 @ 8:00AM
There has been a lot of concern about the amount of help available from the new Job Support Scheme (JSS) and the third Self Employed Income Support Scheme (SEISS) grant, so Chancellor Rishi Sunak has provided additional funding for both of these schemes ...
Both the Job Support Scheme and SEISS have been increased because of the new three-tier system!
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He told Parliament last week that the new three-tier approach will help to control the spread of Coronavirus, but acknowledged that even businesses that remain open still face profound economic uncertainties.
"So far, enhanced support was only offered to
businesses in tier three!"
But hospitality businesses also face significant difficulties in tier two as well. Yes, they are not legally required to close, but limits on the number of customers and curfews are causing many more problems with both cashflow for the business and the retention of staff.
So the chancellor announced three changes to existing support schemes:
For businesses in tier two areas, local authorities can provide grants to those worst affected. In tier two restricted areas business premises are eligible for up to £2,100 per month. Payments are retrospective back to August 2020. The Chancellor believes this could help up to 150,000 businesses in England and this includes hotels, restaurants, B&Bs.
For businesses which have not been legally required to close, but are suffering impact from tier two restrictions, the Job Support Scheme rules have now been amended. Instead of requiring employees to be brought back for 33% of their original hours, they now need only be employed for 20% of their hours. The employer's contribution to wage bills for those not working has been cut from 33% to 5% and businesses in all three alert levels are now eligible.
The Government is also doubling the third payment of the Self-Employed Income Support Scheme (SEISS) from 20% of previous earnings to 40% with a maximum of £3,750 per month.
In operation, the Job Support Scheme starts on the 1st of November and covers everyone in the United Kingdom. For each hour not worked, the employee will be paid up to two-thirds of their usual salary. The Government will now pay up to 61.67% up to a maximum of £1,541.75 per month. Employees can also claim the Job Retention Bonus worth £1,000 per employee should they still be employed in January 2021.
For the self-employed, there are two additional taxable SEISS grants available for those who were eligible for grants one and two. These will be paid in two lump sums covering 3-months. The first grant will cover November 2020 until the end of January 2021 and will be at 40% of three months' average trading profits, capped at £3,750.
The second grant covers February 2021 until April 2021. The Government has yet to set the percentage payment but further information on that will be released in due course.
"Remember, JSS is aimed at vulnerable businesses, especially targeting the hospitality, leisure and retail industries!"
I do wonder if there will be a sufficient incentive for businesses that are struggling to retain staff. This focus on 'viable jobs' means that even though the Government is contributing, many businesses are employing people they would normally make redundant when they see a significant downturn in business income.
The SEISS increase for the next grant is very welcome, however, and I know that many self-employed individuals will breathe a sigh of relief that it has been significantly increased.
Until next time ...
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about the changes to the Job Support Scheme or SEISS, call me on 01908 774320, leave a comment below or click here to ping over an email and let's see how I can help you.
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About Roger Eddowes ...
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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