Government expands Job Support Scheme to provide support for businesses told to close under new Covid restrictions

New Covid-19 / Coronavirus measures are coming into place in Southport and across the Liverpool City Region
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Today, the Government is expanding its Job Support Scheme to provide temporary, localised support to businesses whose premises are legally required to close as a direct result of Coronavirus restrictions by the Government.

And for those same businesses, Minitsers are increasing the generosity and frequency of cash grants they are eligible for as well.

Southport, which is part of Sefton, is among the areas which are due to be included in the new restrictions which are due to be announced on Monday (12 October). Covid-19 figures in Sefton, and across the Liverpool City Region, have been rising in recent weeks. Sefton currently has the ninth highest rate of Covid transmission in England. 

Alongside our Winter Economy Plan, these announcements will give businesses, whether they are open or required to close, the flexibility to adjust and plan over the coming months – and comes on top of the £200 billion package of support we have committed since the beginning of the crisis.

Throughout this crisis, the Government's economy priority remains the same: to protect jobs. And as the crisis evolves, its policy evolves – which is why it introduced the Jobs Support Scheme to support the wages of people in work, and the Job Retention Bonus to encourage businesses to bring employees back from furlough. 

Below are details published by the Government today on what the scheme is and how it will work: 

Expansion of the Job Support Scheme for businesses in local lockdowns

  • We will protect jobs in local businesses legally required to close by introducing new wage support through the Job Support SchemeIn order to protect jobs in UK businesses whose premises are legally required to close as a result of local or national coronavirus restrictions, the government will provide a grant for employees unable to work, covering two-thirds of their usual wages and subject to a cap. This will form part of the Job Support Scheme, providing emergency short-term support for jobs and businesses.
     
    • Employer eligibility: Eligible employers must have an existing PAYE scheme that was registered on or before 23 September, as well as a UK bank account. It will be available to businesses where, as a result of coronavirus restrictions set by one or more of the four governments in the UK, and imposed on a national or local basis, the employer is required to close the premise entirely. This includes businesses restricted to delivery or collection services only. Additionally, businesses that have been legally closed under coronavirus restrictions since March, and are still legally closed, are eligible. It is open to businesses across the UK.
       
    • Employee eligibility: Employees working at the above premises affected are eligible and must be on their employer’s PAYE payroll on or before 23 September 2020. They cannot work or volunteer for their employer during the period they are claiming. If they have not previously used the CJRS, they are eligible.
       
    • Payment: Each eligible employee will be paid a grant by the government worth two-thirds of their usual monthly pay, up to a limit of £2,100 per month. Employers will be required to cover employer NICS and pension contributions in full, but make no further contribution to wage costs. We estimate around 50 per cent of employees for this scheme will not have any associated NICs costs. Employers can top up employee pay if they wish.
       
    • Duration: The scheme is temporary and will start on 1 November, for a period of six months, and with a review in January. Payments will be available from the beginning of December.
       
    • Job Retention Bonus: Employers will be able to claim the Job Retention Bonus for employees, provided they are eligible and previously part of the CJRS. Job Support Scheme grants can be used by employers to pay an employee’s wages and help meet the JRB minimum income threshold.
       
  • This builds on the original Job Support Scheme, which helps businesses keep staff on reduced hours rather than laying them off. The company will continue to pay its employee for time worked, but the burden of hours not worked will be shared equally between the employee, employer and government – one third each way. The scheme is focused on supporting productive work, so employees need to be working at least a 33 per cent of the time, and this percentage will move up over time.
     
  • And to support the self-employed, we will also provide a grant extension for self-employed small businesses who used the existing SEISS scheme. Eligibility criteria will be refined to check whether the self-employed trader is still trading and is suffering lower revenues as a result of coronavirus. The grant will match the average grant of the Job Support Scheme, and represent 20 per cent of three month earnings, for November to January.

More generous business grants

  • Businesses forced to close due to national or local restrictions will now receive up to £3,000 per month, with payments coming after two weeks instead of three. This is an increase on the Local Restrictions Support Grant scheme, launched on 9 September, in which businesses forced to close for three weeks or more due to a nationally-imposed local lockdown in England would receive grants of up to £1,500 for each three-week closure period.
     
  • We are making this scheme more generous. Businesses will now receive up for £3,000 per month and will receive payment after only two weeks of closure, rather than three. We are also extending the scheme to include businesses which have been forced to close on a national rather than a local basis, or which have not been legally able to reopen since the first lockdown in March – such as nightclubs:
     
    • For business properties with a rateable value of £15,000 or under, grants will be worth £1,334 per month, or £667 per two weeks.
       
    • For business properties with a rateable value of between £15,000 and £51,000, grants will be worth £2,000 per month, or £1,000 per two weeks.
       
    • For business properties with a rateable value of £51,000 or over, grants will be worth £3,000 per month, or £1,500 per two weeks.
       
  • Local authorities will continue to receive discretionary funding to support businesses. Local authorities will continue to receive 5 per cent of the funding which they received for the Local Restrictions Support Grant scheme as a discretionary fund – which they can use to support closed businesses outside of the business rates system.
     
  • Grants will be available from 1 November. Grants will be administered by local authorities, and will remain in place until April 2021. We estimate that grants will cover, in full, the average rent of around 90 per cent of small and medium-sized hospitality businesses in the UK (those with a rateable value of below £51,000).

Q&A

How is this not just a new furlough? Haven’t you completely u-turned and done what Labour have called for all along?

  • This is a temporary expansion of the Job Support Scheme specifically to support businesses who have been legally forced to close due to temporary restrictions in local areas. We have built flexibility into the Job Support Scheme to provide this emergency short-term support for jobs and businesses. It is not a universal scheme as before.
  • But, fundamentally, our economic priority throughout this crisis remains the same: to protect jobs. But we have said that we would be pragmatic and evolve as the crisis evolves – which is why we are introducing these measures today.
  • By contrast, Labour fail to offer any concrete solutions of their own – preferring to play politics and carp from the sidelines.

What about businesses which are effectively closed due to social distancing restrictions, but haven’t been forced to close?

  • In practice, there is no specific way to determine those businesses or their supply chains. These businesses have already benefitted from our £200 billion package of support, including grants, loans, business rates relief and more. They are also benefitting from the more generous Local Restrictions Support Grants which we are announcing today.
  • We have been clear from the beginning of this crisis that we cannot save every job. We will provide new opportunities for people, which is why the Prime Minister announced last week the Lifetime Skills Guarantee, building on the Kickstart Scheme and increased financial support for businesses to take on apprenticeships and traineeships announced in the Plan for Jobs in July.
  • We will explore what is possible for businesses that have been told ‘not to reopen’, but which are not ‘legally closed’.

Why is this only starting on November 1st?

  • The Coronavirus Jobs Retention Scheme is still running until the end of October – that’s eight months of total support.
  • More generous Local Restrictions Support Grants will are also being announced today, covering the average rent of around 90 per cent of small and medium-sized hospitality businesses in the UK.
  • Businesses can also benefit from our wider £200 billion package of support of grants, loans and business rates relief, a temporary VAT cut and more time and flexibility to pay back loans.

Why are claims only in arrears, when the CJRS was in advance?

  • The new JSS scheme is temporary and will start on 1 November 2020, with the claims service through which employers claims payment available from HMRC from early December.
  • Eligibility for this scheme depends on whether a business is subject to relevant restrictions. Claims need to be in arrears as the premises that can use the scheme will change as the need for restrictions change. Employers will first need to know if they are eligible for the scheme, and then make claims one month in arrears. 
  • Paying in also arrears allows HMRC to make key checks, against payroll data, to stop fraudulent or criminal claims and protect taxpayer money.

Why have you announced this before more national/local restrictions?

  • It is important that businesses have confidence and certainty in restrictions before they are announced, and before they are potentially required to close, which is why we announced these measures today.

You said you wouldn’t keep 'unviable' jobs propped up forever – what’s changed?

  • This is localised, emergency support for the duration of temporary restrictions in those areas where business premises have been required to close.
  • Through the announcements made in the Winter Economy Plan, the Job Support Scheme also supports part-time working by supporting productive jobs in businesses who do not face restrictions but are subject to lower demand over the winter.