As coronavirus infection rates rise and restrictions tighten across the UK, the UK Chancellor has extended the Job Support Scheme (again). Last week we reported on the extension of the Scheme to businesses legally required to close under tier 3 of the alert system (https://www.proskauertaxtalks.com/2020/10/covid-19-extension-of-the-uks-job-support-scheme/). Yesterday (22 October) the UK Chancellor announced the following updates:

  • Employees must work a minimum of 20% of their usual hours per month (previously 33%) and the employer’s contribution for non-worked hours is 5% (previously 33%), capped at £125 per month.
  • The government will pay 61.67% of hours not worked, up to a cap of £1,541.75 per month (for businesses in tier 3 forced to close the government will pay 67%) so that employees will earn at least 73% of their usual salary (based on the cap of a monthly reference salary of £3,125).
  • The support available to the self-employed (previously reported by us https://www.proskauer.com/blog/uk-chancellor-announces-winter-economy-plan) has been increased with the taxable grants now covering 40% of average monthly trading profits over a three month period (previously 20%) with a maximum grant of £3,750.
  • Additional funding is being provided to Local Authorities to support businesses in tier 2 areas which have been severally impacted (but are not legally required to close) by the restrictions on household mixing. The level of funding received by the Local Authorities will depend on the number of hospitality, hotel, B&B and leisure businesses in their area and it is assumed that such businesses receive grants equivalent to 70% of the grants which tier 3 businesses required to close are eligible.

 

Photo of Robert E. Gaut Robert E. Gaut

Robert Gaut is a tax partner and head of our UK tax practice in London.

Robert provides advice on a full range of UK and international tax issues relating to fund formation, private equity deals, finance transactions and private equity real estate matters…

Robert Gaut is a tax partner and head of our UK tax practice in London.

Robert provides advice on a full range of UK and international tax issues relating to fund formation, private equity deals, finance transactions and private equity real estate matters, including experience with non-traditional equity transactions, such as debt-like preferred equity and co-investments for private credit investors.

Robert is highly-regarded for his ability to provide sophisticated tax advice to many of the world’s preeminent multinational companies, sovereign wealth funds, investment banks and private equity and credit funds. Clients have commented to legal directories that Robert is “really technical and knows his stuff,” and “has a very strong knowledge of the various tax laws, but also presents more innovative techniques and strategies.”

He is consistently recognized by Chambers UK and The Legal 500 United Kingdom, and has been recognized by Chambers Global as a leading individual in tax. The Legal 500 comments that Robert has “vast experience in a range of matters, including corporate tax structuring, real estate tax and fund formation.”