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Expansion of support for business and employers in Tier 2 areas

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22nd October, 2020

The Chancellor has announced today an expansion of support for businesses and employers in Tier 2 and Tier 3 areas in England and Wales.

This has come at a time when England and Wales are split into various tiers corresponding to the level of infection and cases per 100,000 of the population.

There have been three new developments:

Business Grants

The Chancellor announced additional funding to Local Authorities (LAs) to support direct business grants of up to £2,100 per month.

  • This is mainly for businesses in the hospitality, accommodation and leisure sectors which have seen their income and business affected by the increase of restrictions in Tier 2.
  • The government will provide additional funding to allow LAs to support businesses in Tier 2 areas which are not legally closed, but which are severely impacted by the restrictions on socialising. The funding LAs will receive will be based on the number of hospitality, hotel, B&B, and leisure businesses in their area.
  • The Chancellor explained it will be up to LAs to determine which businesses are eligible for grant funding in their local areas, and what precise funding to allocate to each business, but it is intended to be sufficient for a grant of up to £2,100 for each hospitality business affected.
  • Businesses in Tier 3 areas will qualify for greater support whether closed (up to £3,000/month) or open.
  • These grants will be retrospective and claims can be dated from August 2020.

Changes to Job Support Scheme

The Job Support Scheme (JSS) has been amended to reflect the further pressures that businesses are facing and from 1 November 2020 employers who are wishing to use the JSS will now have their obligations lessened under the changes.

  • The minimum hours requirement has been reduced to 20%, so those who would ordinarily work 5 days per week will be eligible for the scheme if they work just one day a week.
  • The employer will pay the employee in full for time worked.
  • Of the unworked hours, the employer contribution towards wages shall also be diminished from a third to just 5%.
  • The government will increase its contributions up to 61.67% of wages for hours not worked, up to £1,541.75 per month. This is an increase from the initial announcement of a £697.92 cap for a third of the unworked hours.

Self Employed Support

The self employed have also been aided by an increase in funding grants from 20% of average earnings to 40%, being capped at £3,750 per month up from £1,875 per month.

  • These Grants will be paid in two instalments each covering 3 months.
  • The first grant will cover a three-month period from the start of November 2020 until the end of January 2021.
  • The second grant will cover a three-month period from the start of February until the end of April 2021.

We will keep you updated of any further amendments or announcements concerning the JSS or any other support package regarding Employers or Employment law as it happens.

The full Treasury press release can be found here.

Helen Watson

Employment Law

Head of Team and Partner
Email: [email protected]
Tel: 01244 405 565

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