On 22nd October, Chancellor Rishi Sunak outlined the next phase of the Government’s planned economic response to the ongoing COVID-19 pandemic.

Businesses and the self-employed workers who are legally required to close under the new tiered restrictions and even those that can stay open, particularly in the hospitality industry, are facing profound economic uncertainty. The Government has announced three further steps, outlined below, which aim to provide greater support during the next phase of the pandemic. These steps alone might not be sufficient for some of the hospitality businesses to survive. But with careful planning and swift execution, cash received through these grants can help restaurants/café businesses to survive the current pandemic.

New Cash Grants Scheme

The new cash grants scheme is aimed to provide further support to those businesses affected by the Tier 2 restrictions, even if they aren’t legally closed.

  • The Government will fund local authorities to provide affected businesses in their area with cash grants
  • For every month that Tier 2 restrictions apply, all businesses in the hospitality, accommodation and leisure sectors will receive a cash grant worth up to £2,100. This represents 70% of the grant provided to closed businesses in Tier 3
    • For properties with a rateable value of £15,000 or under, businesses will receive cash grants of £934 per month
    • For properties with a rateable value over £15,000 and below £51,000, businesses will receive grants of £1,400 per month
    • For properties with a rateable value of exactly £51,000 and over, business will receive grants of £2,100 per month
  • Businesses in any areas of the country that have been under enhanced restrictions for several months can backdate their grants from the point at which these restrictions began
  • Businesses are likely to need to apply to their local authority for cash grants

Enhanced Job Support Scheme

The Chancellor announced some key changes to the existing Job Support Scheme to make it more viable for businesses to keep staff on the payroll, rather than make them redundant. The scheme starts on 1st November 2020 and will apply to eligible businesses in all alert levels.

  • The Government will contribute 61.67% of non-worked hours, capped at £1,541.75 per month
  • Employers will pay 5% of non-worked hours, capped at £125 per month, and NICs and automatic enrolment pension contributions in full as a contribution
  • To qualify employees must be on an employer’s PAYE payroll between 6th April 2019 and 23rd September 2020 and must work at least 20% of their usual hours in the claim period
  • Employers will be able to make a claim online through Gov.uk from 8th December 2020 and will be paid on a monthly basis in arrears upon RTI submission

Enhanced Self-Employment Income Support Scheme (SEISS)

Reiterating that the Government has now provided over £13 billion of support to self-employed people during the pandemic, the Chancellor described sole traders, small businesses and the self-employed as “the dynamic entrepreneurial heart of our economy”. With this in mind, he announced enhanced third and fourth grants for this cohort of workers.

  • Third and fourth grant will double the provision for sole traders, small businesses and self-employed workers from 20% to 40% of their average monthly profits, increasing the maximum grant to £3,750 in total
  • Grants will be paid in two lump sum instalments each covering three months, from November 2020 to January 2021 and February to April 2021
  • Grant will be available to anyone who was previously eligible for the SEISS grant one and grant two, and meets the eligibility criteria
  • Grant application open and close dates are not yet known