Rishi Sunak has recently told MPs that the support packages for businesses and employees affected by the pandemic are to be extended across country-wide, not just to areas with the highest-level alerts.

This is a significant change from the Job Support Scheme (JSS) which is replacing the furlough scheme from 1 November 2020. Crucially, this scheme will offer more grants to companies and the self-employed. Most importantly, this will be backdated to August.

Why has this decision been taken?

The Government has been under significant pressure to broaden its compensation package since the introduction of the 3-tiered England-wide response system, which has hit the hospitality sector disproportionately. Businesses placed into tier-2 restrictions, in particular, have seen their ability to trade drastically reduced and that has prompted Government action. 

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What did the previous JSS provide?

Previously under the JSS, employees had to work at least a third of their usual contracted working hours and these hours would be paid for by the company. For the rest of the hours not worked, the Government paid a third up to £2,500 of an employee’s salary, with the balance i.e. the last third being forfeited by the employee by way of a salary reduction.

What is new?

Under the new scheme, employer contributions have been reduced from having to pay 33 % of salary to 5% of salary, with the employer still forfeiting a third of their wages, but the Government stepping in to pick up the 62% slack meaning that employers are paying much less than under the previous JSS scheme.

Also, the number of hours that employees must work to qualify has also been reduced to 20% as opposed to a third. And in a further support to firms, the number of hours employees must work to qualify was reduced from 33 per cent to 20 per cent.

What about other qualifying direct business support?

A range of businesses have been forced to close under tier three restrictions. However, recently these have been extended to tier two restrictions where grants of £2,100 per month, aimed mainly at those within the hospitality sector.

What about the self-employed?

The self-employed will be eligible for grants worth up to 20 per cent of profits doubled to 40 per cent of profits, meaning the maximum grant will increase from £1,875 to £3,750.  This will come on top of an unspecified further grant from February to April.  It is still far short of the support offered to employees.

What does this mean for where I live?

There will be much more support available to businesses and employees, in particular in the hospitality industry which face tier two restrictions. In particular, this will provide massive support to companies in areas such as London and Essex, Birmingham and parts of the West Midlands, Nottinghamshire and Derbyshire, as well as Newcastle, Middlesbrough and Sunderland and most of the North East. Employers in those areas will see employees become eligible for the JSS for fewer hours worked, and will contribute less in salary.

But do NOT forget the Kickstarter Scheme

This scheme launched late September and due to roll out nationally at the beginning of November will last until November 2021. It is not to be sniffed at: a lifeline for many struggling businesses, better than the Youth Training Scheme as it applied to all of those currently claiming Universal Credit the landscape of which has transformed since lockdown started, as it encapsulates many first time claimants and graduates seeking work. This must be one of the most innovative plans yet to get the economy rolling and businesses back on their feet. 

So, what is it?

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The Government pays for 25 hours a week at minimum wage for any employee your business employs for 6 months. You receive £1,500 to assist you with any costs you may incur the employee is paid via your payroll. If you like, an extended job interview. The scheme only applies to those between the ages of 18-24 and has been both criticised and lauded for this. Some believing, it should apply to all Universal Credit claimants and those who have been forced to begin claiming later in life due to business breakdown as a direct result of Covid. For sure, this is something currently under consideration, however, without doubt it is the young who through no fault of their own, who have been blind-sided by this pandemic and disproportionately affected, who are being made redundant now in droves from otherwise paying jobs. 

So, whilst you consider your own business downturn and problems, spare a thought to how you could help a youngster without it costing you much if anything at all, but who in turn could sky rocket your business and propel it forward. The knowledge, enthusiasm and positivity, especially in the field of digital marketing is not to be over-looked and could prove invaluable to your business.

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