With the Government's new three-tiered Covid alert system in place, what support will be available for businesses which are forced to close due to local lockdown measures?

The new system requires local authorities to declare whether their constituency is at medium, high or very high risk. Where areas are determined to be at very high risk, social mixing indoors and outdoors is prohibited, forcing many businesses to close.

Following the Government's update on October 12, this is what we know so far regarding the Job Support Scheme:

• From November 1, 2020, if businesses are able to open safely and are not prohibited from doing so under the local lockdown rules, but there is a limited or uncertain demand for the business, the Job Support Scheme should be used.

• If a business is forced to close due to local lockdown and an employee cannot work for seven consecutive days or more, the Government will pay two thirds of that employee's "normal wage", up to a maximum of £2,100 per month. It is not clear at this point what "normal wage" means and further guidance on this is expected.

• Employers will not be required to contribute towards wages and will only be asked to cover National Insurance and pension contributions.

• The scheme will run initially for six months with a review after three months. Payments will be made in arrears via a HMRC claim service, available from early December.

• Businesses forced to close will also receive a cash grant of up to £3,000 per month, rather than £1,500 every three weeks.

Although further details are expected soon, employers should take these changes into consideration before deciding whether or not redundancy is the only option for employees.

  • Michael Delaney is a partner at award-winning law firm VWV, which has offices in Clarendon Road, Watford. Get in touch on 07909 912 564 or mdelaney@vwv.co.uk .