Government unveils more support for Tier 2 lockdown locations
This year has been a hard one on all businesses, and many have had to rely heavily on Government support. With more and more locations heading into Tier-2 lockdown, it left many asking if there would be any support similar to the previous packages put forth. It has been recently announced that hospitality, leisure, and accommodation businesses that are under Tier 2 restrictions will receive expanded support in the form of cash grants to help aid them through what is undoubtedly going to be a challenging few months. The Chancellor Rishi Sunak announced that those firms who are in the high Tier 2 areas will be eligible to apply for cash grants up to the value of £2,100 per month while they are under those restrictions.
This new financial support package will be part of the new “Job Support Scheme” and is set to replace the furlough system, which is currently in place and has been for the past few months. According to Sunak, the scheme is designed to be “simpler and more generous,” with many confused and unsure about previous schemes and if they were eligible to claim. The Job Support Scheme comes into effect on the first of November, and staff only need to be working one day a week to be eligible. Employers will also need to contribute less, paying 5% of their employees’ unworked hours rather than 33%, as was previously required. In the same way as taking precautions such as using a calculator to work out and get your life insurance, it’s important to support your business.
The grants are predominantly for those who will be specifically targeted by the lockdown restrictions in the hospitality, accommodation, and leisure sector. This includes Bed and Breakfasts, hotels and restaurants that are experiencing an adverse reducting in takings due to the fact households can no longer mix, the earlier curfew, and those who have to legally close. The Treasury has estimated that around 150,000 businesses will be able to apply to claim the grant. The amount of money that companies will be able to get depends on the rateable value of the businesses in the area. Those who have a rateable value of £15,000 or under will be allocated a grant of £934 a month, those between £15,000 to £51,000 will get £1,400 a month, and those valued at £51,000 and above will be allocated up to £2,100 per month. The grants are equivalent to 70% of the amount which has been given to businesses that had to legally close due to Tier 2 restrictions, which is worth up to £3,000 per month.
For this grant, the authority to decide who is eligible is not down to the government but to local authorities themselves. The Treasury has said it is down to the authorities to determine how much can be allocated, and the cash grant for businesses may differ depending on the authority.
Rishi Sunak said of the grant: “I’ve always said that we must be ready to adapt our financial support as the situation evolves, and that is what we are doing today. These changes mean that our support will reach many more people and protect many more jobs.
I know that the introduction of further restrictions has left many people worried for themselves, their families, and communities. I hope the government’s stepped-up support can be part of the country pulling together in the coming months.”
The grants can be backdated to August, which is another helpful move to aid those businesses that have really felt Coronavirus’s impact in the past few months.
There will also be more support in place for self-employed individuals, following on from the prior SEISS grants that were available before. These two new systems will be available to those who could get the previous grants and is for those who are continuing to trade but experiencing reduced demand due to COVID-19 or those who cannot trade for the time being. The first of the two grants will cover three months from the start of November 2020 until the end of January 2021 and will be 40% of three months’ average trading profits. It will be paid out in one installment and capped at a maximum of £3,750. The next grant will also cover three months and will be from the start of February 2021 until the end of April the same year. The percentage of this is yet to be revealed, but the government will reveal it in due course.
You can find out more about the new grants and support for Tier 2 restrictions and how your business might be impacted by searching online and on the Governments website.