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Employment Update 2021: A Third National Lockdown and new Government support introduced for affected businesses and employees  
 
Following the Prime Minister’s announcement of a further national lockdown for England last week, the Chancellor has announced that the Government will be implementing additional grants and extensions of existing schemes to help support businesses and protect jobs as a result of the latest lockdown restrictions and tightening of the Covid-19 restrictions.
 
On 5 January 2021, the Chancellor announced that businesses in England in retail, hospitality and leisure sectors are to receive a one-off top-up grant worth up to £9,000 per property, which is intended to help tide them over until the Spring. The devolved Governments of Scotland, Wales and Northern Ireland will each receive funding too to put in place devolved policies. The scheme is expected to benefit over 600,000 businesses, worth over £4.6 billion in total across the UK. The Chancellor has also announced that the next Budget is due to be held on 3 March 2021 and it is anticipated that a more comprehensive package of measures will be introduced to protect jobs and businesses to help the economy recover.  
 
Under the newly updated scheme, any business which is legally required to close as a result of the new lockdown measures and which cannot operate effectively remotely will be eligible for a grant.  
 
The one-off top-ups will be granted to closed businesses as follows: 

  • £4,000 for businesses with a rateable value of £15,000 or under
  • £6,000 for businesses with a rateable value between £15,000 and £51,000
  • £9,000 for businesses with a rateable value of over £51,000

The cash will be provided on a “per property” basis.  

The new grants are in addition to the extended furlough scheme (see below) and to existing business support, including grants of up to £3,000 for closed businesses. Businesses should check the Government website which is regularly updated and apply for all eligible funding.  
 
A discretionary fund of £594 million will be made available for local authorities and devolved administrations to support other businesses that are not eligible for the grants, who might also be affected by the restrictions.  

Businesses will also be given until the end of March 2021 to access the Bounce Back Loan scheme, Coronavirus Business Interruption Loan scheme and the Coronavirus Large Business Interruption Loan scheme, which were initially due to close at the end of January 2021.  
 
Furlough scheme extended until April 2021 and updated to include employees with childcare responsibilities  
 
The Coronavirus Job Retention Scheme (‘CJRS’) has also been extended until 30 April 2021 as an additional measure to support businesses and affected employees. The CJRS scheme was due to finish on 31 March, but the Chancellor has confirmed it will now be extended for an extra month for employees in the UK. Employees need to have been employed on or before 30 October 2020.   
 
Employers can continue to claim for up to 80% of employee’s salaries for time they haven’t worked, worth up to £2,500 per month, and will continue to be responsible for paying National Insurance Contribution payments and pension contribution payments for employees’ furloughed hours.  
 
HMRC has updated its guidance on the furlough scheme to make clear it includes parents with childcare responsibilities. This follows extra calls for support for those working parents having to deal with forced school closures, home-schooling and childcare responsibility, alongside trying to work. There are of course a number of other potential options available for employers with employees who are unable to work because of childcare issues, including parental leave, flexible working, temporary changes to hours of work or agreeing a period of unpaid leave or annual leave with the employee. 
 
Employees who are “unable to work (including from home) or are working reduced hours” because they have caring responsibilities arising from the Covid-19 pandemic can also be furloughed, which is a welcome clarification of the eligibility criteria for many employees across the UK.  
 
If you are an employee or employer with any queries on the latest changes to the Furlough scheme or your employment law rights generally during the pandemic, please feel free to contact our experienced employment team for specialist advice and assistance (This email address is being protected from spambots. You need JavaScript enabled to view it.
 
This update has been prepared based on the information available and Government guidance as at 15 January 2021. We will provide more detailed updates as matters develop. We would always advise you consult the latest government guidance or contact our team for up to date advice. 

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