With a growing number of areas being placed into local lockdowns under the Government's 3 tiered COVID alert system, what support will be available for businesses who are forced to close due to local lockdown measures?
The 3 tiered system requires local authorities to declare whether their constituency is at medium, high or very high risk. Where areas are determined to be at very high risk, social mixing indoors and outdoors is prohibited, forcing (amongst others) pubs and bars, gyms and leisure centres, betting shops and casinos to close.
We have previously reported on the Job Support Scheme and further information is expected to be released imminently.
However, following the Government update on the 12 October 2020, this is what we know so far:
- From the 1 November 2020, if
businesses are able to open safely and are not prohibited from
doing so under the local lockdown rules, but there is a limited or
uncertain demand for the business, the Job Support Scheme, as we
previously reported, should be used.
- If a business is forced to close due
to local lockdown and an employee cannot work for 7 consecutive
days or more, the Government will pay 2/3 of that employee's
'normal wage', up to a maximum of £2,100 per month. It is
not clear at this point what 'normal wage' means and
further guidance on this is expected.
- Employers will not be required to
contribute towards wages and will only be asked to cover National
Insurance and pension contributions.
- The Scheme will run initially for 6
months with a review after 3 months. Payments will be made in
arrears via a HMRC claim service, available from early
- Businesses forced to close will also receive a cash grant of up to £3,000 per month, rather than £1,500 every three weeks.
Although further details are expected soon, employers should take these changes into consideration before deciding whether or not redundancy is the only option for employees.
We will keep you up to date with further information as it is released by the Government.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.