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Winter Support Scheme: an update for businesses

Chancellor Rishi Sunak has announced changes to the government’s programme to help businesses under coronavirus restrictions.

Last updated: 26 Oct 2020 3 min read

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The government has updated its economic plan to support businesses, particularly those in the hospitality, leisure and accommodation sectors, that have seen their trade drop as a result of social restrictions in Tier 2 areas.

At a business round table on 22 October, Sunak heard from concerned business leaders about how the impact of localised lockdowns had been worse than they feared. They said a significant fall in consumer demand had caused profound economic harm, with many business owners arguing they would be better off financially under Tier 3 restrictions that offer greater government support.

Acknowledging the challenging times ahead, the chancellor said he would increase financial aid through the existing Job Support Scheme (JSS); the Self-Employment Income Support Scheme (SEISS); and by expanding business grants to help firms in Tier 2 lockdowns.

In detail

Job Support Scheme (JSS)

Sunak said Thursday’s announcement would help employers keep staff on rather than make them redundant.

Businesses can now ask employees to work 20% of their usual hours, instead of 33% under the previous JSS model. And rather than paying 33% of each employee’s wages, the employer’s contribution to those unworked hours is just 5%.

The cash could benefit up to 150,000 businesses in England that aren’t legally required to close but have been adversely affected by local restrictions

The government will also cut the number of hours an employee must work before a company can receive support, reducing it to 20% from 33%, so that staff working just one day a week will be eligible. The JSS will come into effect on 1 November and covers all nations of the UK.

Self-Employment Income Support Scheme (SEISS)

This will increase the amount of average monthly trading profit covered by the two forthcoming self-employed grants from 20% to 40%, meaning the maximum grant will increase from £1,875 to £3,750.

Business grants

The chancellor also announced that additional funding will support cash grants of up to £2,100 a month – primarily for UK businesses in the hospitality, accommodation and leisure sectors.

These grants will be backdated to August for areas that have already been subject to restrictions, and come on top of higher levels of additional business support for local authorities moving into Tier 3.

The cash could benefit up to 150,000 businesses in England – such as hotels, restaurants, B&Bs and many more – that aren’t legally required to close but have been adversely affected by local restrictions.

Regional variations

These latest changes are UK-wide, although the tiered system of restrictions is different in Scotland, Wales and Northern Ireland.

While England has a three-tier system, Scotland is due to bring in a five-tier system of alert levels from 2 November. The middle three tiers are commensurate to the English system, but Scotland has an extra tier at both the top and the bottom.

Wales, meanwhile, will enter a two-week national lockdown on Friday 23 October, equivalent to England’s Tier 3 lockdown on all but essential businesses. Northern Ireland went into a four-week lockdown on 16 October.

For more information and to find out what your business can claim, visit GOV.uk.

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