The Chancellor surprised businesses and employees badly hit by restrictions recently when he announced changes to the forthcoming Job Support Scheme. What are the changes and how will they affect you?

On Thursday 22 October, Chancellor Rishi Sunak made changes to his Job Support Scheme to offer more help for businesses. In a surprise move, Sunak made the scheme more generous to accommodate the three-tier system and provide more support to struggling businesses affected by restrictions.

According to the government’s website, the Job Support Scheme will provide different types of support to businesses so that they can get the assistance they need at the right time, based on their situation.

Employees will need to work a minimum of 20 per cent of their usual hours and the employer will pay them as normal for those hours. However, the employee will receive 66.67 per cent of their normal pay for hours not worked. Companies will only be expected to pay five per cent of their salary for the hours not worked, up to a maximum of £125 per month. The government will pay the remainder, up to a maximum of £1541.75 per month. Employees will therefore continue to receive at least 73 per cent of their normal wages.

Accommodation, leisure and hospitality businesses who have seen a drastic fall in revenue due to lockdown restrictions will be able to claim up to £2100 in cash grants per month if they are under tier two rules. The grants will be retrospective, meaning they will cover any business affected by lockdown restrictions since August.

Business grants

The scheme will offer grants for businesses in Tier 2 locations. The grants will be distributed by councils.

Tier three businesses that have to close due to lockdown restrictions can already claim £3000 per month. Additionally, employees of tier three businesses who can’t work due to businesses being forced to close will receive two thirds of their normal pay, to a maximum of £2083.33 per month. The government will cover 100 per cent of these costs.

Extra help for self-employed will see the amounts paid rise from 20 per cent of profits to 40 per cent. This means that the maximum payout will increase from £1875 to £3750. An additional self-employed grant will be available to cover February to April 2021. In a nutshell, self-employed people who have stopped trading or have a significant reduction in trade can apply.

The Chancellor said he would ‘make no apology for responding to changing circumstances’.

The Job Support Scheme starts on 1 November 2020 and runs until the end of April 2021. The furlough scheme ends on 31 October.

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