Dear Colleague,
Today I have set out the next stage of our Winter Economy Plan: support for those businesses that may be asked to close this winter.
Following my announcement that I am expanding the Job Support Scheme (JSS), and increasing the generosity and frequency of Local Restrictions Support Grants, I wanted to share with you more details of these schemes and how this Government is supporting and protecting jobs and livelihoods.
Job Support Scheme expansion for closed business premises
The JSS is being expanded to provide temporary, localised support to businesses across the UK whose premises are legally required to close as a direct result of Coronavirus restrictions set by one or more of the four governments of the UK.
This expansion of the JSS will help businesses through the period they are affected by these restrictions, supporting the wage costs of employees who have been instructed to and cease work in eligible premises and enabling those premises to reopen as quickly as possible when they can. It will help protect employee incomes, limit unemployment and maintain employer-employee matches.
This is part of the Job Support Scheme, available to employers from 1 November 2020 for 6 months, with the scheme reviewed in January. Further guidance will be published in the coming weeks. Employers will be able to make a claim on a monthly basis online through gov.uk from early December 2020.
Eligibility for employers
In line with the rules for the JSS already announced: all employers with a UK bank account and a UK PAYE scheme registered on or before 23 September can claim the scheme. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before this date. This scheme will cover businesses that, as a result of restrictions set by one or more of the four governments in the UK, are legally required to close their premises. This includes businesses told to provide only delivery and/or collection services from their premises. This scheme is open to employers across the UK, and we look forward to working constructively with the devolved administrations to ensure it operates effectively in all four nations.
The scheme will pay a grant to the employer calculated based on the number of eligible employees who cannot work at the relevant premises (which has been required to close by government). Employers will only be able to use the scheme for employees who have been instructed to and cease work (paid or unpaid for that employer).
Eligible employees cannot work for a minimum of 7 consecutive (or calendar) days. An employee can return at a later date. Claims must not overlap and must be made monthly in arrears. These payments will be taxable, and employers will be required to cover employer NICS and automatic enrolment pension contributions in full, where applicable, but are not required to make further contribution to wage costs. However, employers can top up employee pay if they wish.
Neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme (CJRS).
Eligibility for employees
In line with JSS payments for hours not worked, the grant per eligible employee available from the UK Government is two-thirds of their normal pay up to a limit of £2,100 per month. Further detail on how normal pay is calculated will be set out in guidance. If your employer is closed by Government regulation then they can claim under the applicable rules. When that changes and they are able to re-open they can claim under the wider JSS for firms facing reduced demand under the criteria we outlined in September. Employers will be able to claim the Job Retention Bonus for employees provided they are eligible and previously part of the CJRS. JSS grants can be used by employers to pay an employee's wages and help meet the JRB Minimum Income Threshold.
What does this cover?
The employer must use the scheme to cover their employees’ wages and pay relevant payroll taxes. The whole of the grant must be used to meet employee costs. The grant will not cover Class 1 employer NICS or pension contributions, although these contributions will remain payable by the employer. Payments will be made in arrears, reimbursing the employer for the Government’s contribution.
Local Restrictions Support Grant
On 9 September, the Government announced the Local Restrictions Support Grant scheme. This scheme provided businesses which are forced to closed for three weeks or more due to a nationally imposed local lockdown in England with grants of up to £1,500 per three-week closure period.
The Government is now making this scheme more generous so that businesses receive up to £3,000 per month, and are eligible for payment sooner, after only two weeks of closure rather than three. The Government is also extending the scheme to include businesses which have been required 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.
Businesses will receive the following:
- For properties with an RV of £15k or under, grants to be £1,334 per month, or £667 per two weeks;
- For properties with an RV of between £15k-£51k grants to be £2000 per month, or £1000 per two weeks; and
- For properties with an RV of £51k or over grants to be £3000 per month, or £1500 per two weeks.
Local Authorities will continue to receive 5% of the funding which they received for the Local Restrictions Support Grant scheme as a discretionary fund, which the Government will encourage them to use to support business that have been legally mandated to close by the Government but are outside of the business rates system.
Grants will be administered by Local Authorities, and eligible businesses will probably need to provide their details to their Local Authority to access this support.
Back in March, we hoped we were facing a temporary period of disruption. In response, we provided one of the most generous and comprehensive economic plans anywhere in the world with over £190 billion of support for people, businesses and public services, as we protected our economic capacity.
Our Winter Economy Plan and the expanded Jobs Support Scheme gives businesses, whether they are open, or required to close, the flexibility to adjust and plan over the coming months, in the full certainty that even with restrictions, they have our support.
Our economic priority remains the same: to protect jobs. Today’s announcements significantly strengthen our toolkit for doing just that for workers and businesses over the weeks and months to come.
RISHI SUNAK