It was announced on Friday that the government will cover 67% of wages, up to a maximum of £2,100 per month, for employees of businesses who are forced to close due to any new restrictions, to reduce the spread of Covid-19. Already some areas have had tough new regulations imposed on them and there will be another announcement by prime minister Boris Johnson later today where it is expected more regulations will be introduced to areas where the infection has risen the most.
Details Of The New Scheme
In this new scheme employers will not have to contribute towards the wages of employees and will only be required to cover NICS and pension contributions. Businesses will only be able to participate in the scheme if they are subject to local restrictions. Also staff must be off work for a minimum of seven consecutive days for them to be eligible for this payment.
Expansion Of The Job Support Scheme Will Provide A Safety Net
On the Accountancy Today website Rishi Sunak is quoted, saying:
“I have always said that we will do whatever is necessary to protect jobs and livelihoods as the situation evolves.
“The expansion of the Job Support Scheme will provide a safety net for businesses across the UK who are required to temporarily close their doors, giving them the right support at the right time.”
Increase In Guaranteed Funding For Northern Ireland
The article also goes on to point out that:
`In addition, the chancellor revealed the government is increasing cash grants to businesses in England shut in local lockdowns to help support fixed costs.
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.
The grant is aimed to benefit hundreds of thousands of businesses including restaurants, pubs, nightclubs, bowling alleys.
The devolved administrations in Scotland, Wales and Northern Ireland will also reportedly benefit from a £1.3bn increase to their guaranteed funding for 2020-21.`
All the above are very welcome moves by the government, with the increase in guaranteed funding crucial for Northern Ireland to help keep businesses afloat and employees in jobs during these perilous times. Whether many employees will be able to keep their heads above water and pay their bills on just 67% of their normal wages remains to be seen. And it will not help those businesses who are not forced to close but find it impossible to keep trading any longer due to the downturn in the economy.
If you have a business and you need help from an experienced accountant to guide you through these uncertain times please get in touch with our offices by calling 028 3752 2909.