Job Support Scheme expansion: simplicity is key
12 October 2020: ICAEW has welcomed the expansion of the Job Support Scheme to support businesses closed by local lockdown measures but urged government to keep the scheme easy to navigate for businesses already struggling with cashflow issues.
Commenting on the measures announced by Rishi Sunak on Friday, ICAEW Chief Executive Michael Izza said that with tighter restrictions across many parts of the country, it was right the government should offer targeted additional support to businesses forced to close through no fault of their own.
“The extension to the Job Support Scheme, and further cash grants, will offer some relief to struggling firms and worried families,” said Izza.
He also urged the government to ensure the scheme is easy for firms to navigate. “As the success of the original furlough scheme demonstrated, simplicity is key,” he continued. “In particular, it should be clearer how this extension will fit with the terms of the Job Support Scheme previously set out in the Winter Economy Plan.
“We must also not forget that many other firms will be badly affected, and, even if they manage to remain open, they will be worrying about their cashflow and survival.”
Job Support Scheme expansion
Driven by a spike in coronavirus cases across the UK, the new measures come just two weeks after the Chancellor’s Winter Economy Plan, where he announced the Job Support Scheme – billed at the time as a replacement for furlough.
Starting in November, the government will cover two-thirds of employees’ salaries up to £2,100 a month where coronavirus measures have forced firms to shut by law. Businesses required to close by local lockdowns can also apply for cash grants of up to £3,000 per month.
The new expansion announced on Friday will apply specifically to those in businesses formally or legally asked to close for a minimum of seven consecutive days over winter as part of local or national restrictions. The firms will receive grants to pay the wages of staff who cannot work. The payments will be taxable, and employers will be required to cover employer national insurance contributions and auto enrolment contributions in full (where applicable).
Employers or employees who have not previously used the Coronavirus Job Retention Scheme can still claim on the new scheme.
In a factsheet accompanying the announcement, the government stated its expectation that large employers using the Job Support Scheme “will not be making capital distributions, such as dividend payments or share buybacks, whilst accessing the grant.”
The Job Support Scheme is available to employers for six months from 1 November 2020 with a review in January. Further details on the expanded Job Support Scheme can be found in this government factsheet. with more detailed guidance to be published in the coming weeks.
The Chancellor also announced an increase to cash grants paid to businesses in England shut by local lockdowns to support with fixed costs
These grants will be linked to rateable values, with up to £3,000 per month payable every two weeks, compared to the up to £1,500 every three weeks which was available previously. The grants are available along the following delineations:
A government statement said the devolved administrations in Scotland, Wales and Northern Ireland will benefit from a £1.3bn increase to their guaranteed funding for 2020-21 - allowing them to match the measures in England if they wish.