Chancellor announces extra Tier 2 Support

In the face of mounting concerns about the disparity in help available, Chancellor Rishi Sunak has announced changes to the government’s coronavirus job support scheme (JSS) to provide additional funding for businesses placed under tighter restrictions but not legally required to close

Chancellor Rishi Sunak has announced today that the government will significantly increase the reach of its winter support scheme to ensure livelihoods and jobs across the UK are protected in the difficult months to come, supporting jobs and helping to contain the virus.

Under the revised scheme, employers will pay less, and staff can work fewer hours before they qualify.

At the same time, the taxpayer subsidy has been doubled.

Businesses in tier two areas, particularly in the hospitality sector, had complained that they would be better off if they were under tier three restrictions.

In response to such arguments, Mr Sunak has now changed the terms of the JSS.

Instead of a minimum requirement of paying 55% of wages for a third of hours, as announced last month at the launch of the Winter Economic Plan, employers will have to pay for a minimum of 20% of usual hours worked, and 5% of hours not worked.

The government will now fund 62% of the wages for hours not worked. This more than doubles the maximum payment to £1,541.75. In the most generous case, the taxpayer will now go from funding 22% of wages to just under half.

The scheme will, as before, be open to all small businesses and larger businesses that can show an impact on revenues.

The chancellor also announced specific help for hospitality and leisure businesses in tier two areas.

English councils will be funded to give monthly grants of up to £2,100 to 150,000 hotels, restaurants and B&Bs. Devolved nations will be given the equivalent funding for other nations, under the Barnett Formula.

The generosity of the self-employment scheme has also been doubled from 20% to 40% of profits, with a maximum grant now of £3,750 a month.

The changes to the JSS mean that employers are still obliged to establish whether they can continue to pay just over a fifth of usual employees for workers they wish to keep on.

You can read full details in the press release here

JSS Open Factsheet

Business Grants Factsheet

HMRC – SEISS