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Today, the Prime Minister will outline a new ‘traffic light’ system of coronavirus rules and restrictions. It’s highly likely that, in areas covered by a ‘red’ or ‘level 3’ alert, hospitality and leisure businesses will have to temporarily close. As a result, many firms need to know about the new local lockdown furlough options announced last Friday.
As you will know, the government’s original furlough scheme – the Coronavirus Job Retention Scheme – ends on 31st October. It will be replaced by the Job Support Scheme, which will see the state pay a third of the hours that employees don’t work. To be eligible, employees must work at least a third of their normal hours.
Local lockdown furlough alternative
If a business has to close its doors because of local lockdown restrictions, then it of course becomes impossible for employees to work a third of their normal hours.
To help these firms, last Friday the Chancellor announced important changes to the Job Support Scheme. In a nutshell, it will be expanded to support businesses that are required to close their doors during a local lockdown. It will do this by paying 67% of employees’ wages, up to a maximum of £2,100 per month. Employers will only have to pay National Insurance contributions and auto-enrolment pension contributions.
Additionally, cash grants for businesses that have to close because of a local lockdown will increase to up to £3,000 per month, depending on a business’s rateable value.
When does the expanded scheme begin?
The expanded Job Support Scheme goes live on 1 November and will be available for six months. In January, government will review the scheme and the level of contributions may change.
How do I apply for the scheme?
Essentially, the Job Support Scheme will now work as a local lockdown furlough scheme. With the current furlough scheme (CJRS) coming to an end later this month, we expect details of how to apply for the Job Support Scheme to become available soon. We will update you when we have this information. In the meantime, if you have any queries, please get in touch with your account manager at THP.
About Jon Pryse-Jones
Since joining THP in 1978, Jon Pryse-Jones has been hands on with every area of the business. Now specialising in strategy, business planning, and marketing, Jon remains at the forefront of the growth and development at THP.
An ideas man, Jon enjoys getting the most out of all situations, “I act as a catalyst for creative people and encourage them to think outside the box,” he says, “and I’m not afraid of being confrontational. It often leads to a better result for THP and its clients.”
Jon’s appreciation for THP extends to his fellow team members and the board. “They really know how to run a successful business,” he says. He’s keen on IT and systems development as critical to success, and he continues to guide THP to be at the cutting edge and effective.