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Important and useful economic/financial news from McGills

As the economic impact of Covid-19 continues to affect businesses in our area, it is important to know what help is available.

The Government recently announced further changes to their financial support measures aimed at helping a wider range of businesses affected by the pandemic and resulting regional restrictions.

In a special address to Parliament, the Chancellor, Rishi Sunak, outlined three new steps that are being taken to help businesses in all tiers of lockdown, whether closed or open.

To help you understand what these measures may mean for you and your business, we have produced a helpful update:

Job Support Scheme (JSS) Extension 

The new JSS came into effect on 1st November 2020, replacing the previous furlough scheme which ended in October. 

Originally it required employers to pay around a third of their employees’ wages for hours not worked and required employees to work at least 33% of their normal hours.

In recognition of the difficulties businesses are facing, particularly in some adversely affected sectors, the JSS will now only require employers to make a 5% financial contribution towards unworked hours, while the Government will contribute 61.67% (capped at £1,541.75). 

The latest change will also see the minimum hours requirements for employees cut to just 20% of their regular working time.

The Chancellor confirmed that the extended version of the JSS can still be used alongside the £1,000 Job Retention Bonus and did not affect the other elements of the JSS for businesses legally required to close, which cover around two-thirds of an employee’s wage.

Self Employed Income Support Scheme increased

In his earlier Winter Economy Plan, the Chancellor had confirmed that the Self-Employed Income Support Scheme (SEISS) would be extended into 2021 with the payment of two new taxable grants.

He has now confirmed that the first of the extended grants, which will cover the three months from November – January will increase from 20% of previous trading profits, capped at £1,875 to 40% of previous trading profits capped at £3,750.

The second of the new SEISS grants will cover three months from the start of February until the end of April 2021. The level of the second grant will be set by the Government in due course.

Business Grants

The Government is providing additional funding to allow Local Authorities (LAs) to support businesses in high-alert (Tier 2) level areas, which are not legally closed, but have been severely impacted by the restrictions on socialising. Although Malmesbury is currently in the lowest Tier 1 ‘medium risk’ category, it is important to know what help is available should the tier level in our area increase in the future.

Cash grants, worth up to £2,100 per month, are primarily aimed at businesses in the hospitality, accommodation and leisure sector.

The amount of funding received by each LA will, therefore, be based on the number of hospitality, hotel, B&B, and leisure businesses in each area and it will be down to the discretion of each LA to determine which businesses are eligible for grant funding and what level of funding to allocate to each business.

While we await further details of these schemes in the days and weeks to come, it is sensible to prepare your business for these changes.

If you would like support implementing these new measures or have questions about how they may affect your business, please contact Deborah Morton at McGills Malmesbury on 01666 823201.

Author: admin