SUNAK'S SURPRISES SUMMARISED
Updated: Oct 29
The under pressure Chancellor was expected to unveil support for Tier 2 business that had seen demand collapse after the Covid Alert system was imposed, but he went much further than many had expected.
L.A. Grants for Tier 2 hospitality, accommodation and leisure businesses
Tier 3 pubs serving food are now eligible for support from November 1
Major changes to the Job Support Scheme make it viable to stop redundancies
November self employed grant doubled to 40% of average profits
Back dated business grants to August in areas under previous, enhanced restrictions
When originally announced, the JSS – which will come into effect on November 1 - saw employers paying a third of their employees’ wages for hours not worked, and required employers to be working 33% of their normal hours.
Today’s announcement reduces the employer contribution to those unworked hours to just 5%, and reduces the minimum hours requirements to 20%, so those working just one day a week will be eligible.
That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.
Job Support Scheme (Closed) for businesses legally required to close remains unchanged.
Today’s announcement increases the amount of profits covered by the two forthcoming self-employed grants from 20 per cent to 40 per cent, meaning the maximum grant will increase from £1,875 to £3,750.
1) Hospitality businesses in very high alert level (Tier 3) that have remained open in spite of falling demand will now be eligible for Local Authority support too from November 1st
2) Local authority cash grants of up to £2,100 per month, primarily for businesses in the hospitality, accommodation and leisure sector, who may be adversely impacted by the restrictions in high-alert ( Tier 2) level areas.
3) Grants will be available retrospectively too for areas which have already been subject to restrictions, and these will come on top of higher levels of additional business support for Local Authorities moving into Tier 3.
4) The funding local authorities will receive will be based on the number of hospitality, hotel, B&B, and leisure businesses in their area.
Local authorities will receive a funding amount that will be the equivalent of:-
• Rateable value £15,000 or under - £ 934 per month.
• Rateable value between £15,000-£51,000 - £1,400 per month.
• Rateable value over £51,000, - £2,100 per month.
This is equivalent to 70% of the grant amounts given to legally closed businesses under tier three, the highest level of restrictions (worth up to £3,000/month).
Local authorities will also receive a 5% top up amount to these implied grant amounts to cover other businesses that might be affected by the local restrictions, but which do not neatly fit into these categories.
These grants could benefit around 150,000 businesses in England, including hotels, restaurants, B&Bs and many more who aren’t legally required to close but have been adversely affected by local restrictions nonetheless.
The detail of the allocation of funds for the grant scheme will be decided independently by each Local Authority.
Who is eligible?
Local authorities have the freedom to determine the precise eligibility criteria for these grants in their local areas. The guiding principle for local authorities is to use the funding to support businesses which have not been legally required to close, but which are nonetheless severely impacted by reduced demand caused by Tier 2 restrictions on socialising.
How can businesses access the grants?
Grants will be administered by Local Authorities, and businesses are likely to need to apply to their local authority for support. It is up to local authorities to determine the payment schedule and timings for these grants.
What can businesses use the grants for?
Businesses can choose to spend the grants as they wish. We expect that many businesses will use the grants to cover high fixed property-related costs.