New support for businesses forced to close

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Date: 12 October 2020

A closed sign in a shop window forced to close by local coronavirus restrictions

From 1 November, the government's Job Support Scheme will include support for any business that is required to close under new coronavirus restrictions or local lockdowns.

Under the expanded Job Support Scheme, firms whose premises are legally required to shut for a period of time over winter as part of local or national restrictions will receive grants to pay the wages of staff who cannot work. In these circumstances, the government will pay two-thirds (or 67%) of employees' salaries, up to a maximum of £2,100 a month.

Chancellor of the exchequer Rishi Sunak said: "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."

Under the scheme, employers will not be required to contribute towards wages and only asked to cover NICs and pension contributions. According to government estimates, around half of potential claims are likely not to incur employer NICs or auto-enrolment pension contributions and so face no employer contribution.

Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days.

The UK-wide scheme begins on 1 November and will continue for six months, with a review in January. In line with the rest of the Job Support Scheme, payments to businesses will be made in arrears, via an HMRC claims service that will be available from early December. Employees of firms that have been legally closed in the period before 1 November are eligible for the Coronavirus Job Retention Scheme (CJRS).

In addition, cash grants for businesses in England that are required to close in local lockdowns have been increased. The new grants will be linked to rateable values, with up to £3,000 per month payable every two weeks, compared to the up to £1,500 every three weeks which was available previously.

The devolved administrations in Scotland, Wales and Northern Ireland will receive a £1.3 billion increase to their guaranteed funding for 2020-21 - allowing them to implement similar measures.

These measures will sit alongside the original Job Support Scheme - which is designed to support businesses that are facing low demand over the winter months - and the £1,000 Job Retention Bonus which encourages employers to keep staff on payroll.

Written by Rachel Miller.

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