The chancellor has unveiled increased support for jobs and workers hit by Covid restrictions after growing clamour from firms in tier two areas.
Rishi Sunak announced big changes to the Job Support Scheme (JSS) – set to replace furlough in November. 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.
Caroline Harwood, Employment Tax Partner at Crowe UK, reacts to the Chancellors announcement on the changes “These new measures will be greeted with a sigh of relief by many businesses, particularly those in the hospitality industry, who are suffering the most following the end of the ‘Eat Out to Help Out’ scheme and facing yet another drop in capacity as we enter the winter months.
“Indeed, many have voiced concerns over the inconsistencies in the Government’s pre-existing measures. Businesses legally required to close in Tier 3 areas were benefitting from the support of the expanded Job Support Scheme, while those in Tier 2 areas were suffering significantly from reduced footfall and limited support from the original Job Support Scheme. In many cases, this would not have been sufficient to enable employers to keep staff in jobs.
“While the new grants and revised Job Support Scheme (which offers government funding of up to 62% of wage cost with the employer paying just 5%) will not match the level of income that many businesses will have enjoyed prior to the start of the pandemic, these measures will provide vital funding, enabling many to keep staff in jobs throughout the second wave of COVID-19.
“The business communities who were facing the stark reality of being unable to pay their employees, even at a reduced level of working, and despite help from the original Job Support Scheme, will now have some breathing space during the coming months. Without intervention from the Government, there’s no doubt that many hundreds of businesses would have perished this winter.”
Please contact the Employers Advisory Group at Crowe Caroline.Harwood@crowe.co.uk or call 020 7842 7274.