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Job Support Scheme extended to pay wages at businesses shut down by coronavirus restrictions

Job Support Scheme extended to pay wages at businesses shut down by coronavirus restrictions

Businesses which are legally required to close due to local or national restrictions to curb the spread of coronavirus will receive grants to pay up to two-thirds of the wages of staff who cannot work, the Chancellor Rishi Sunak has announced.

Major new restrictions, expected to be announced on Monday, could mean that in the worst-hit areas of England, certain businesses – possibly including pubs and restaurants – are forced to close. Pubs and restaurants across much of central Scotland have already been told they must close at 6pm today (Friday 9 October) and remain shut until Sunday 25 October.

The Government has now said it will support firms that are affected by restrictions by paying two-thirds of each employee's salary, up to a maximum of £2,100/month per person. The support will be available for businesses that are forced to close, and also those required to provide only delivery and collection services from their premises, or food and drink outdoors.

Employers won't have to contribute towards their employees' wages and will only be asked to cover national insurance contributions and pension contributions.

The Government's also announced that it's increasing the cash grants which are currently available to businesses in England which are forced to shut due to local lockdowns – firms will be able to claim up to £3,000/mth and will be eligible if forced to shut by local or national restrictions.

We're continuing to chase some of the details of how the extended scheme will work and will update this story as we get new info. See our Coronavirus Employees' Help and Coronavirus Self-Employed & Small Limited Company Help guides for a full rundown of the different support schemes available.

How will the extended scheme work?

Here are the key need-to-knows about the expansion of the Job Support Scheme:

  • It'll begin on Sunday 1 November and be available for six months, though the Government says there will be a "review point" in January. If a business is forced to close before Sunday 1 November, it won't be eligible for this scheme until the start of November. In the meantime it'll have to rely on the existing furlough scheme, though that's no longer open to new entrants.

  • Businesses will be able to claim a grant to cover their employees' wages while they are subject to legal restrictions. It doesn't matter whether the restrictions are local or national, and they can be imposed by the UK Parliament or the Welsh Assembly, Scottish Parliament or Northern Ireland Assembly. We're checking what happens if a business is partially hit by restrictions, and if all larger firms are eligible – some aren't for the rest of the Job Support Scheme – and will update this story when we hear back.

  • Businesses will be able to claim for two-thirds of each employee's salary, up to £2,100/mth. They won't have to pay anything towards their employee's wages, though they can choose to top up wages if they wish. But they will have to pay the employee's national insurance and pension contributions.

  • The amount you get will be based on your 'normal' pay. However, we don't yet know how that'll be calculated – the Government says it'll be publishing further guidance. Those on zero-hours contracts and who work irregular hours ARE included in the main Job Support Scheme – we're checking if they will be covered by this extension too.

  • Employees must be off work for a minimum of seven consecutive days in order for a claim to be eligible.

  • To be eligible, you must have been on your employer's PAYE payroll on or before 23 September 2020. That's the key cut-off date.

  • You CAN'T do any work for your employer while on the scheme, but CAN work elsewhere. So you can choose to work or volunteer for another business or charity, so long as your contract with your employer doesn't forbid it.

  • Businesses will be able to claim the grants via a HM Revenue & Customs claims service that will be available from early December. Payments will be made on a monthly basis.

The Government says further guidance on the scheme will be issued by HM Revenue & Customs in due course.

Shut-down businesses will also be able to claim up to £3,000/mth

Businesses in England that are required to shut because of local interventions – such as lockdowns or "targeted restrictions" – are already able to claim a grant worth up to £1,500 per property every three weeks.

The Government is now making this scheme more generous so that businesses receive up to £3,000/mth, rather than up to £1,500 per three weeks. They will be eligible for payment sooner, after only two weeks of closure rather than three, and the grant will then be payable every two weeks.

The amount businesses will be able to claim from their local authority depends on their rateable value:

  • Small businesses with a rateable value of or below £15,000 will be able to claim £1,300/mth.
  • Medium-sized businesses with a rateable value between £15,001 and £51,000 will be due £2,000/mth.
  • Larger businesses will be able to claim £3,000/mth.

The Government has also said it's extending the scheme to help businesses which have been forced to close on a national rather than a local basis. This means that, for example, nightclubs across the country will be eligible.

We're checking whether these changes to the rules on grants for businesses come into effect immediately or on Sunday 1 November, and will update this story when we know more. Applying for a grant does not affect eligibility for other forms of Government support, such as the Self-Employment Income Support Scheme.

All the above applies to England only, as business support is fully devolved. The Government has said it'll add an extra £1.3 billion to the 2020/21 guaranteed funding it provides the devolved administrations in Scotland, Wales and Northern Ireland, which it says will help them devise similar measures if they wish. Scotland and Wales have yet to announce any specific additional business grants, while in Northern Ireland there is currently no local lockdown.

What does the Government say?

Chancellor Rishi Sunak said: "Throughout the crisis the driving force of our economic policy has not changed.

"I have always said that we will do whatever is necessary to protect jobs and livelihoods as the situation evolves.

"The expansion of the Job Support Scheme will provide a safety net for businesses across the UK who are required to temporarily close their doors, giving them the right support at the right time."