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Chancellor Rishi Sunak's latest Covid-19 government support update

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Chancellor Rishi Sunaks latest Covid-19 government support update

Chancellor Rishi Sunak has unveiled new support for workers, businesses and the self-employed hit by restrictions imposed as coronavirus cases rise across the UK.

The government listened to the concerns of businesses in tier two areas that felt not enough was being done to support them. Although they were able to stay open, demand had collapsed and no support was to be provided, risking further redundancies and business closures.

The Chancellor announced three further steps that will be taken, these are summarised below:

New grant scheme for businesses specifically impacted by tier two restrictions

  • This grant will be available to businesses even if they are not required to close
  • The government will fund local authorities to provide business in their area with direct cash grants
  • It will be up to individual local authorities on how to distribute funds to allow for flexibility
  • There will be enough funding to give every business premises in the hospitality, leisure and accommodation sectors a direct grant worth up to £2,100 for every month tier two restrictions apply (equivalent to 70% of the value of the grants for closed businesses in tier three areas)
  • These grants will be retrospective – businesses in any area that has been under enhanced restrictions can backdate their grants to August 202

Job Support Scheme update

Closed businesses:

  • If businesses are required to close, the government will cover the full cost of employers paying two-thirds of people’s salary where workers cannot work for a week or more.

Open businesses:

  • Under the original scheme, to be eligible workers had to work at least a third of their hours. This requirement will now only be to work 20% of a worker’s hours.
  • The employer contribution for the hours not worked was 33% under the original scheme, the employer contribution will now be 5%.
  • The scheme will apply to eligible businesses in all alert levels.

Enhanced support for the self-employed

  • The government will be doubling the next round of self-employed income support from 20% to 40% of individuals’ income to a maximum grant of £3,750. 

We await draft legislation and further guidance as to how the updates announced today will work in practice.

For further advice, contact our specialist BLHR and Employment team. I can be contacted on 01206 217624 or