The Government is spending £28m of reserves to beef up the payroll funding scheme and launch a new initiative to help cover businesses' rents, insurance and other fixed costs.
The money will come out of a £40m contingency pot that was ringfenced in the latest Government Plan to meet future covid-related costs.
Ministers say that the support is needed to tackle the cumulative difficulties that businesses have faced during the pandemic, particularly those that have had to close for during key trading periods, such as hospitality and retail over Christmas and the New Year.
£12m of the extra £28m will pay for “enhancements” to the co-funded payroll scheme, which was launched last April.
These include increasing the maximum monthly wage subsidy from 90% of £2,000 to 90% of £2,500; increasing ‘detriment +’ equation from + 20% to +30%; and allowing firms to claim a subsidy for higher-paid staff who take home between £4,610 and £8,840, which puts them on a par with self-employed workers.
Pictured: The amount of support that a business received for its fixed costs will be based on the rateable value of its premises.
The £9.5m “Fixed Cost Support Scheme” will cover all fixed costs of businesses that have had to close because of covid restrictions and 50% of them for businesses that have been able to operate but have been “materially restricted” by measures.
The payments will be tiered and based on the rateable value of the business’s property, with the those in the top tier – with a rateable property value of £10,000 or more – receiving up to £10,000 a month.
For businesses that don’t have a fixed home or are based at a residential property, the payment will be cover up to 50% of the actual fixed costs, as long as they fall within the definitions of the scheme.
The scheme will run from this month until April. Businesses will claim a month in arrears so when the online portal opens in early February, people can start to claim for January.
The remaining £6.5m of the £28m will be fund the deferral of GST payments and social security contributions for the first quarter of this year.
In total, the Government spent £119m on support packages in 2019 and have earmarked another £109m for 2021, including the £50m Fiscal Stimulus Fund.
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