Everything you need to know about support for businesses in Tier 2
After concern about a lack of support for businesses in tier two in England, Chancellor Rishi Sunak has unveiled fresh support.
Tier two restrictions, which entail curbs on indoor socialising between households and curfews for hospitality businesses, currently apply to a number of areas across England, including London and parts of Yorkshire.
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Hide AdUnlike tier three restrictions, under which hospitality businesses not serving “substantial meals” have been mandated to close, a number of businesses in tier two areas remain open.
Previously, little support was available to tier two businesses whose trade was being affected by restrictions.
Sunak has now announced a fresh package of support for tier two businesses, however. This is what’s currently available.
Job Support Scheme
The furlough scheme, introduced earlier in the year, saw the government pay 80 per cent of the wages of any employees who could not work during the pandemic.
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Hide AdThe scheme was due to finish at the end of October, but any areas under tier three - “very high” - restrictions will see employees paid 67 per cent of their wages if they cannot work under the new Jobs Support Scheme.
PM Boris Johnson has said that, along with Universal Credit payments, this 67% will rise to 80% of usual wages for workers in tier three.
Employers in tier three areas who are mandated to close must still pay their staff’s national insurance and pension contributions, receiving a grant of £3,000 per month.
Staff in these areas must be off for a minimum of seven days to qualify for the support.
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Hide AdIn tier two areas, the Jobs Support Scheme has been made more generous.
Previously, employees would have had to work at least 33% of their usual hours to have their wages topped up by the government (33%) and their employer (33%).
Instead, employees will only have to work a minimum of one day a week to be eligible for support, while employers will only need to contribute 5% for unworked hours.
Kickstart Scheme
Employers can also apply for funding to take on job placements through the Kickstart Scheme - though only employers taking on a minimum of 30 placements can apply.
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Hide AdOtherwise, employers can find a Kickstart gateway to apply on your behalf.
Cash incentives from the government are on offer for retaining furloughed employees until at least January, (£1,000) giving out-of-work 16-24 year olds a “high quality” six-month work placement (£1,500) or taking apprentices until the end of January. (£2,000 for under-25s, £1,500 for over-25s).
Tax and rates relief
Regardless of which tier they’re in, businesses will get business rates relief for the 2020 to 2021 tax year if they belong to the retail, hospitality or leisure sector.
The scheme, which allowed businesses to defer VAT payments, has now ended and payment of the deferred VAT must be made by March 2021.
Loans and grants
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Hide AdThe government is now allowing businesses in tier two areas to apply for grants worth up to £2,100 a month to support them through the period of restrictions.
Payments will be backdated for any areas where restrictions have been in place for some time.
For small to medium sized businesses, the Bounce Back Loan Scheme (BBLS) is available to “enable smaller businesses to access finance more quickly during the coronavirus outbreak”.
The Coronavirus Future Fund is also available to smaller “innovative” businesses who are facing financing difficulties due to the pandemic.
The scheme issues convertible loans between £125,000 to £5 million.
Businesses Interruption Loan Schemes are available to businesses of any size who have been affected by coronavirus.