New support announced for businesses ordered to close

New support announced for businesses ordered to close

Key Contact: Claire Knowles

Author: Rebecca Mahon

On Friday, Rishi Sunak announced that if a business is ordered to close because of coronavirus, the government will provide additional support to help that business with wage costs.

If a businesses is legally required to close so that their employees cannot work for a minimum of 7 days, the government will pay 2/3rds of wages (up to £2100 a month per employee). The employer will not be obliged to “top up” pay, but will need to pay NICs and pension contributions.

The UK-wide scheme is set to run for 6 months from 1 November. It sits alongside the Job Support Scheme (JSS) which is designed to support businesses that are facing low demand over the winter months, and the £1,000 Job Retention Bonus (JRB) which encourages employers to keep staff on payroll.

This announcement will be welcomed by those in the hospitality sector, who fear that a “circuit breaker” approach similar to that which took effect on Friday evening in Scotland will be announced for England and Wales later today. However, the support will only be available to businesses that are legally required to close, not (it seems) to those who choose to close because of a lockdown-linked downturn in trade.

In addition to the UK-wide assistance with wage costs, the government is also increasing the cash grants to businesses in England shut in local lockdowns to support with fixed costs (such as rent). 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.

We will provide further guidance as and when it becomes available however in the meantime, please contact our employment team if you require employment/HR support.

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