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Sunak extends support to businesses in lower tiers

Under growing pressure to support businesses facing losses of revenue under the government’s tiered Covid-19 lockdown strategy, Chancellor Rishi Sunak updated his support plans this morning.

22nd Oct 2020
Editor in Chief (interim) AccountingWEB
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Rishi Sunak presents his updated job support plans to Parliament
Rishi Sunak_BBC Parliament TV

Chancellor Rishi Sunak returned to the House of Commons for the third time to refine his Covid-19 economic plans. The enhanced support measures include:

“I understand your frustration,” the Chancellor told those regions struggling under lockdown conditions. “These are temporary restrictions to control the spread of the virus.

“People are not on their own. We have an economic plan to protect the jobs of people, wherever they are and whatever their situation. We will listen and respond to their concerns. I make no apology for responding to changing circumstances. So we will go further.”

Support measure overview

The Chancellor made his latest tweaks in a ten-minute statement that was echoed on Sunak’s Twitter feed and followed up with a Treasury press release outlining the enhanced measures.

Extended Job Support Scheme – Even before the scheme comes into effect on 1 November, the funding formula has been adjusted to reduce the employer contribution to the hours employees weren’t able to work from 33% to just 5%. The threshold for support kicking in was also lowered from 33% to 20%, so those working just one day a week will be eligible. According to the Treasury’s example calculation, for employees being paid £587 for their unworked hours, the government would contribute £543 and the employer £44.

Describing it as “one of most generous job support schemes in the world”, the Chancellor said it will apply to eligible businesses in areas affected by any of the three current alert levels.

Before the Chancellor got up to speak AccountingWEB member fawltybasil2575 pointed out  that the guidance for version 1 of the JSS had not yet been released. Perhaps the HMRC drafting team was ordered to start adjusting the conditions and criteria while work was still in progress. 

[Update, 5pm, 22 October: Just before close of play today, the Treasury released new guidance covering both the JSS Open (for businesses that remained open, but affected by restrictions) and JSS Closed (for businesses required to shut up shop).]

Self-employed grantToday's announcement increases the profits covered by the two forthcoming self-employed grants from 20 % to 40 %, meaning the maximum grant will increase from £1,875 to £3,750.

The grants will be available to anyone who was previously eligible for the first two SEISS grants and will be paid in two instalments, the first covering three months from the start of November 2020 and the next to follow at the beginning of February.

“We have provided £13bn to self-employed workers,” Sunak said. “Sole traders, small businesses and self-employed people are the dynamic, entrepreneurial heart of the economy and this government is on their side.”

Business grantsAcknowledging the effects of lockdown restrictions on hospitality businesses that remain open in areas covered by Tier 2 restrictions, the government is setting up a new £1bn grant fund that will be distributed by local authorities to support businesses in their areas. The grants will be retrospective so that businesses operating in areas under enhanced restrictions can get grants going back to August. With an estimated 150,000 businesses eligible for the grants, the average amounts affected businesses are likely to receive is £2,100, the Chancellor said.

‘Patchwork of poor ideas’

Reflecting the exasperation of constituents (and their accountants) who have been wrestling with all the different and changing support measures announced in recent months, Labour shadow chancellor Anneliese Dodds took Sunak to task for his haphazard support plans.

“For months we’ve urged the Chancellor to get ahead of the looming unemployment crisis. Instead we’ve had a patchwork of poor ideas rushed out at the last moment,” she told the Commons.

Describing the government’s approach to businesses in Tier 3 areas as “shambolic”, Dodds pointed out that the deadlines for consulting employees on redundancies in both large and small businesses had passed before the Chancellor realised he needed to reform the furlough scheme that is ending on 1 November.

“How many jobs have been lost because of that inaction? More than 1m… The Chancellor could have done much more if he had acted sooner.”

By the time she was speaking, AccountingWEB members were posting their thoughts in Any Answers. “He’s now just making this up on the hoof. We haven’t even got details of the main Job Support Scheme,” wrote Aweb72.

Duggimon added: “I think I’ve reached the limits of new schemes for the year and will have to have a lie down.”

The subsequent Treasury release of new JSS guidance later in the afternoon will clarify some important points about how the two variants of the Job Support Scheme will operate, but may just add to the stresses experienced by Duggimon and other accountants. Rebecca Cave has now published a further Get the details right guide to the scheme on AccountingWEB.

Replies (17)

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blue sheep
By NH
22nd Oct 2020 14:51

This changes things dramatically imo, I could see no point whatsoever with V1 but I can see many clients using this version

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Replying to NH:
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By Paul Crowley
22nd Oct 2020 15:16

Exactly
They think it's all over: it isn't now.

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Chris M
By mr. mischief
22nd Oct 2020 18:56

Sponsored by lastminute.com

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By Calculatorboy
22nd Oct 2020 22:03

Madmen running the asylum

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By debrahuzzard
23rd Oct 2020 09:57

I see that minimum wage will have to apply to the 20% minimum hours worked by Directors and am concerned what this will mean for future. what are you thoughts on the Director's minimum wage issue?

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By debrahuzzard
23rd Oct 2020 09:57

I see that minimum wage will have to apply to the 20% minimum hours worked by Directors and am concerned what this will mean for future. what are you thoughts on the Director's minimum wage issue?

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Replying to debrahuzzard:
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By kar999
23rd Oct 2020 12:35

debrahuzzard wrote:

I see that minimum wage will have to apply to the 20% minimum hours worked by Directors and am concerned what this will mean for future. what are you thoughts on the Director's minimum wage issue?

That's an important point. There will no doubt be a lot of OMB directors on NIC threshold salaries with no main work doing "admin, training and marketing" for one day a week.

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By 0098087
23rd Oct 2020 11:02

And you all thought Denis Healey was bad....

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Replying to 0098087:
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By johnjenkins
23rd Oct 2020 11:59

I reckon the Government are doing a brilliant job under the circumstances. This is not a UK problem it is a world wide problem. To get the balance between saving lives and saving the economy is a tremendous feat so stop knocking those that are trying their best and start supporting. This covid has taken the world unawares and we are all learning as we go along.
If you want to have a pop, blame China for starting it in the first place.

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Replying to johnjenkins:
By 0098087
23rd Oct 2020 12:06

I'm sorry but I know this an accountancy forum but this demands a reply. Because they are so wedded to the ideological madness that is Brexit they buggered around with a proper track and trace app insisting it would be best as it would be British instead of using Apple or Google who knew what they were doing. The failure of track and trace has caused the major problems.

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Replying to 0098087:
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By johnjenkins
23rd Oct 2020 12:38

Ah the old "blame Brexit ploy eh". Covid is going to be with us ad infinitum whether you have a good or bad track and trace. We had a 6 week lockdown (nothing to do with Brexit) and that didn't get rid of it. All these lockdowns we have now won't get rid of it. It might slow the death rate down, but that's about it. Track and trace will not stop the deaths. This virus targets (mainly 90+%) the elderly with underlying problems. They need protecting while the economy needs to carry on. As for Brexit, I like many others, can't wait to be rid of the EU's shackles and blinkered future.

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Replying to johnjenkins:
By 0098087
23rd Oct 2020 12:50

Yes free of the highest food standards in the world, employment law. You can just see Boriss mates like the owner of Wetherspoons rubbing his hands in glee can’t you.

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Replying to 0098087:
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By johnjenkins
23rd Oct 2020 13:31

Free from strangulation of our economy as the EU head for one country, one army, one economy, one Parliament etc. etc. The EU have done so much damage to our way of life and the way we work, all for the sake of "all for one" and "all for one". The EU would become a communist state under the guise of socialism.

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Replying to johnjenkins:
By 0098087
23rd Oct 2020 13:43

So, was it Farage radio, or widicombe podcast or what?

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Replying to 0098087:
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By johnjenkins
23rd Oct 2020 13:58

As Farage quite rightly said. If we weren't in the EU would we want to join it. In fact I would go as far as to say, let the EU have a vote in each country and see what the result is. Oh yes the Netherlands voted by 61% in a referendum to reject the EU constitution. Oh hang on the EU didn't like that vote so let's have another one with different wording.

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Replying to 0098087:
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By papafur
24th Oct 2020 12:48

You are certainly right that " ideological madness" is a fair description of many who support/campaigned for Brexit. However, it could equally apply to many of the EU's aims and objectives, i.e. An EU army, A Federal Europe imposed by technocrats; CAP, etc..
Sadly, a proper debate on the cost/benefits of EU membership was never had. For that one must blame ALL politicians, including those running the EU. Just blaming the mad Brexiteers smacks of ideological hypocrisy.

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By Ian McTernan CTA
23rd Oct 2020 16:06

More excellent stuff from the Chancellor with practical steps as the pandemic evolves, whilst being sensible and ignoring Labour's alternative which seems to consist of Captain Hindsight and pay everybody 100% forever.

Track and trace would work much better if more people weren't so selfish and gave proper details and obeyed instructions to self isolate.

And don't get me started on the hugely inefficient EU agriculture caused by massive subsidies leading to massive tariffs preventing food prices being lower - the EU pushes up our food prices.

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