On 12 October, Prime Minister Boris Johnson announced his plans to introduce a three-tiered system of local COVID Alert Levels in England to simplify and standardise the rules. The levels, set at medium, high and very high alert, determine the restrictions put in place for that area.
The majority of the country is in medium alert, or Tier 1, meaning they must continue to follow the Rule of Six and the 10pm curfew. Those in high alert or Tier 2 must follow the previous rules as well as not meeting with anybody outside their household in any indoor setting and reducing their number of journeys.
Those in very high alert areas, or Tier 3, must follow much stricter rules. All pubs and bars must close unless operating as a restaurant, wedding receptions are no longer allowed and people should avoid staying overnight in Tier 3 areas, including hotels.
Having already suffered financially from closures and loss of custom earlier in the year, these rules will have a huge impact on businesses and the hospitality industry in particular.
Will there be any financial support?
For businesses who have either had to close or are facing lower demand, the Government has put in place new measures to help retain jobs and ensure business survival.
Coronavirus Job Retention Scheme
On the 23rd March, Chancellor Rishi Sunak announced the Coronavirus Job Retention Scheme (CJRS) which stated that UK employers could claim a grant covering 80% of the wages for a furloughed employee of up to £2,500 a month.
At the beginning of October, this percentage was lowered to 60% and will continue until 31 October 2020, so make sure to make your claim as soon as possible in order to benefit. For help and advice, get in touch with our team at Ryans.
Job Support Scheme
In an attempt to protect operating jobs in businesses that are facing low demand due to COVID-19, the Government has announced the Job Support Scheme that will run from 1 November 2020 to 30 April 2021. This was updated on Thursday 22nd October, when Rishi Sunak announced they would be “increasing their generosity”.
The employer will continue to pay its employees for their time worked but the burden of hours not worked will be split between the employer and the Government. This will be done via wage support and a wage reduction for the employee.
Initially, the Government planned to contribute towards a third of the wages for hours not worked up to a cap of £697.92 per month and the employer would contribute the same. However, in Rishi Sunak’s update on Thursday, he announced that the employer contribution would be reduced to just 5% and the Government would contribute 61.67% up to a cap of £1,541.75 per month, more than doubling their initial offer .
Prior to the update, employees were required to work a minimum of 33% of their usual hours in order to qualify for the scheme, however, they must now work only 20% of their usual hours.
Who is Eligible for the Job Support Scheme?
Employers
All employers with a UK bank account and PAYE scheme are eligible for the grant, regardless of whether or not they have previously used the Coronavirus Job Retention Scheme.
In order to qualify, large businesses must meet a financial assessment test to ensure their turnover now is lower than before the coronavirus crisis.
Employees
In order to qualify for the grant, employees must have been on an employer’s payroll and made a Real Time Information (RTI) submission on or before 23 September 2020. For the first three months of the scheme, the employee must work at least 20% of their usual hours. After three months, the Government will decide whether or not to increase the minimum hours threshold.
What Does it Cover?
For every hour not worked by the employee, the Government will contribute 61.67% of their usual hourly wage and their employer will contribute 5%. Our expectation is that employers cannot pay more than 5% in order to top up employee wages at their own expense.
The wage contribution will be paid to the employer in arrears and will not cover Class 1 employer NICs or pension contributions.
‘Usual wages’ will be calculated in a similar way as for the Coronavirus Job Retention Scheme. Our team at Ryans have created a simple spreadsheet to do this. Please get in touch with us if you wish to calculate your usual hours.
How Can I Claim the Grant?
From December 2020 to 30 April 2021, employers will be able to apply for the grant on the gov.uk website. This new short-term working arrangement must be agreed with employees and must be made available to HMRC on request. For help and advice, get in touch with our team at Ryans.
Job Support Scheme Expansion for Closed Business Premises
For businesses legally forced to shut under Coronavirus restrictions, the Job Support Scheme has been expanded to provide them with temporary support. The Government hopes that this will help to protect employee incomes and reduce unemployment.
Available for six months from 1 November 2020, the scheme will pay two thirds of each employee’s salary up to £2100 a month. The employer won’t be required to contribute but will be asked to cover National Insurance and pension contributions.
Who is Eligible?
Employers
As with the original JSS rules, in order to qualify for the grant, employees must have been on an employer’s payroll and made a Real Time Information (RTI) submission on or before 23 September 2020.
The scheme only covers businesses that are legally required to close as a result of restrictions set by one or more of the four UK Governments, including premises that are restricted to delivery or collection only services. Businesses that are required to close as a result of specific workplace outbreaks by local public health authorities are not eligible.
Employees
The grant will be calculated on the number of eligible employees who have been instructed to cease work for a minimum of 7 consecutive days. Neither the employer or employee needs to have previously used the Coronavirus Job Retention Scheme.
The grant per eligible employee is two-thirds of their usual wages capped at £2,100 per month. ‘Usual wages’ will be calculated in a similar way as for the Coronavirus Job Retention Scheme. Our team at Ryans have created a simple spreadsheet to do this. Please get in touch with us if you wish to calculate your usual hours.
Employees cannot be made redundant or put on notice of redundancy whilst their employer is claiming their grant.
What Does it Cover?
The employer must use the entire grant to cover the employee’s wages and pay the relevant payroll taxes. The wage contribution will be paid to the employer in arrears and will not cover Class 1 employer NICs or pension contributions.
How Can I Claim the Grant?
From December 2020 to 30 April 2021, employers will be able to apply for the grant on the gov.uk website, however, the scheme will be reviewed in January 2021. This new short-term working arrangement must be agreed with employees and must be made available to HMRC on request. For help with applying for the grant and making official agreements with your staff, get in touch with Ryans.
Local Restrictions Support Grant
The Local Restrictions Support Grant (LRSG) supports businesses that were required to close for at least 3 weeks due to local lockdown restrictions imposed by the Government and those who aren’t closed but have been severely impacted. The grant covers businesses that pay business rates on their premises, however, local councils may also provide funding to those who do not pay business rates at their discretion.
Who is Eligible?
In order to qualify for the grant, a business must occupy a property which it pays business rates and has been required to close for at least 3 weeks because of the lockdown on or after 9 September.
Since Rishi Sunak’s most recent update, the Government will be local providing local authorities with additional funding to support businesses in high alert level areas that are not legally closed but are severely impacted by the restrictions on socialising.
Councils may also provide funding to businesses who do not pay business rates but have still been forcibly closed.
Businesses that are still subject to national closures such as nightclubs, businesses that do not rely on direct in-person services and businesses that have reached their state aid limit are not eligible.
What Does it Cover?
If a business has a property with a rateable value under £51,000, they will receive a cash grant of £1,000 for every 3-week period that the business is closed. For businesses with a property with a rateable value above £51,000, they will receive £1,500 for each 3-week period the business is closed.
For businesses that aren’t closed but have been severely affected by the restrictions, the government will contribute the following to local authorities depending on a property’s rateable value:
| Rateable Value | Grant Per Month |
|
<£15,000 |
£934 |
|
£15,000 – £51,000 |
£1,400 |
|
>£51,000 |
£2,100 |
These grants are equivalent to 70% of the grant amounts that are given to legally closed businesses.
How Can I Claim the Grant?
Visit your local council’s website to find out how to apply. Find the website for your local council here.
Job Retention Bonus
The Job Retention Bonus is a one-off taxable payment of £1,000 to the employer for each eligible employee that they furloughed and kept continuously employed until 31 January 2021.
Who is Eligible?
Employers
In order to qualify for the bonus, an employer must have furloughed employees and made an eligible claim for them through the Coronavirus Job Retention Scheme. You will still qualify for the bonus even if you have made a claim for the Job Support Scheme.
Employees
In order to claim the bonus, the employees must be employed until 31 January 2021 and must not be serving a contractual or statutory notice period on 31 January (including notice of retirement). They must also be paid at least the minimum income threshold of at least £1,560 throughout the tax months.
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6 November to 5 December 2020
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6 December 2020 to 5 January 2021
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6 January to 5 February 2021
It is also possible to claim the bonus for employees of a previous business that were transferred to if:
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TUPE rules applied
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PAYE business succession rules applied
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Employees were associated with the transfer of a business from the liquidator of a company in compulsory liquidation where TUPE would have been applied if they weren’t in liquidation.
In order to qualify, the employees must have been furloughed and successfully claimed for The Job Retention Scheme under their new employer, meaning any employees not registered for the JRS by 31 October 2020 (when the scheme ends) won’t qualify.
Non-Employees
Any individuals who are not employees, such as office holders and agency workers, may be eligible for the scheme providing their employer has claimed a grant for them under the JRS.
How Can I Claim the Grant?
You can apply for the Job Retention Bonus from 15 February 2021. Before you can make a claim, you must report all payments made to your employee between 6 November 2020 and 5 February 2021 to HMRC through Full Payment Submissions via Real Time Information.
At Ryans, we can make sure you’re prepared to make your claim by ensuring you’re still enrolled with PAYE, ensuring you copy with your PAYE obligations, keeping your payroll up to date and all other requirements.
More information on how to apply will be made available in January.
At Ryans, we can help your business to claim the financial support it really needs during this difficult time. For more help and guidance on the financial aid available to your business and how to claim it, get in touch today.