PHTM COVID-19 FINANCE UPDATE CHANCELLOR’S PLAN TO AID UK RECOVERY
Delivering his Summer Economic Update in Parliament, the Chancellor announced a package of measures to support jobs in every part of the country, give businesses the confidence to retain and hire, and provide people with the tools they need to get better jobs.
BUSINESSES NEW GRANTS
Minister for Regional Growth and Local Government announced on 30 July 2020 that thousands of smaller businesses in England are set to benefit from £20 million of new government funding to help them recover from the effects of the coronavirus pandemic, the Small and medium sized businesses will have access to grants of between £1,000 - £5,000 to help them access new technology and other equipment as well as professional, legal, financial or other advice to help them get back on track.
It comes on top of an unprecedented package of Government sup- port to help businesses to recover, including the £2 billion Kickstart Scheme which will create hundreds of thousands of new, fully sub- sidised jobs for young people across the country, as well as £1.6 billion invested in scaling up employment support schemes, training and apprenticeships to help people looking for a job.
Businesses will be able to use these new grants to pay for the expertise, equipment and technology they need to adapt, recover and rebuild.
The announcement builds on a £10 million package announced by the Minister earlier this month to help to kickstart the tourism indus- try and support the visitor economy.
The support will be fully funded by the government from the Eng- land European Regional Development Fund and distributed through Growth Hubs, embedded in local areas across England.
JOB RETENTION BONUS
As part of the plan to support jobs, a Job Retention Bonus will be introduced to help firms keep furloughed workers.
UK Employers will receive a one-off bonus of £1,000 for each fur- loughed employee who is still employed as of 31 January 2021.
KICKSTART SCHEME A new £2 billion Kickstart Scheme will also be launched to create hundreds of thousands of new, fully subsidised jobs for young peo- ple across the country.
Those aged 16-24, claiming Universal Credit and at risk of long-term unemployment, will be eligible. Funding available for each six- month job placement will cover 100% of the National Minimum Wage for 25 hours a week – and employers will be able to top this wage up.
Businesses will be given £2,000 for each new apprentice they hire under the age of 25. This is in addition to the existing £1,000 pay- ment the Government already provides for new 16-18 year-old apprentices and those aged under 25 with an Education, Health and Care Plan.
16 JOB RETENTION SCHEME
The Chancellor’s Job Retention Scheme closes on 31 October 2020 with payments for August, September and October listed below. As of 1 July, employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS grant for the hours not worked. From 1 August 2020, the level of grant will be reduced each month.
To be eligible for the grant employers must pay furloughed employ- ees 80% of their wages, up to a cap of £2,500 per month for the time they are being furloughed.
The timetable for changes to the scheme is set out below. Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours:
• FOR AUGUST: the government will pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough and employers will pay ER NICs and pension contributions for the hours the employee is on furlough
• FOR SEPTEMBER: the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed
• FOR OCTOBER: the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employ- ers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed
Employers will continue to able to choose to top up employee wages above the 80% total and £2,500 cap for the hours not worked at their own expense if they wish. Employers will have to pay their employees for the hours worked.
The table shows Government contribution, required employer con- tribution and amount employee receives where the employee is furloughed 100% of the time.
Wage caps are proportional to the hours not worked. JULY
AUG
Govt. contribution: employer NICs and pension contributions
Govt. contribution: wages
Employer contribution: employer NICs and pension contributions
Employer contribution: wages
Employee receives Yes
80% up to £2,500
No –
80% up to £2,500/mth
No
80% up to £2,500
Yes –
80% up to £2,500/mth
SEPT No
70% up to £2,187.50
Yes
10% up to £312.50
80% up to £2,500/mth
OCT No
60% up to £1,875
Yes
20% up to £625
80% up to £2,500/mth
AUGUST 2020
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