On Thursday 22nd October the Chancellor announced changes to the new Job Support Scheme (“JSS”) which was originally announced on 24th September to replace the existing Job Retention Scheme, which closes on 31 October 2020. The JSS is part of the Covid-19 support measures and has been designed to protect viable jobs in businesses who are facing lower demand over the winter months or are required to close due to local lockdown measures.
There are two schemes available with one being targeted at businesses that are open and the second (which was announced on 9 October 2020 as an extension to the scheme) to support those businesses legal required to close due to local lockdowns as a result of Coronavirus.
The scheme will commence on 1 November 2020 and the following details are a summary of the factsheets published by the government. Further details are expected to be published over the coming weeks.
The eligibility details, which apply to both schemes are as follows:
- All employers with a UK bank account and PAYE scheme can claim the grant.
- Neither the employer nor the employee needs to have previously used the Job Retention Scheme.
- Large businesses will have to meet a financial assessment test, so the scheme will only be available to those whose turnover is lower now than before experiencing difficulties from Covid-19. Large businesses are also expected not to making distributions such as dividends or share buybacks, whilst using the scheme. More detail is expected in relation to this.
- Employees must have been on the payroll and part of a Real Time Information (RTI) submission on or before 23 September 2020.
- Employers must agree the new working arrangement with the employees and notify them in writing. This agreement will have to be made available to HMRC on request.
- Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant.
- The scheme will run from 1 November 2020 to 30 April 2021.
- The government will consider whether to revise the scheme from February 2021.
- The grant will be paid in arrears (unlike the Job Retention Scheme Grant, which could be claimed in advance) and will not include any employers NIC’s or pension contributions which will be due.
- The portal for making a claim will open in December 2020.
- HMRC will continue to operate a hotline for individuals to make reports of any fraudulent claims they may be aware of.
The specific details for the individual schemes are as follows:
JSS for Businesses that are not required to close due to local lockdowns
(Based on the announcement on 22 October, but subject to the publication of the final guidance)
If an employer uses the scheme and the employee works for at least 20% of their usual hours, the employer will be able to claim a grant of 61.67% of the usual hourly wage for hours not worked by the employee up to a maximum of £1,541.75 a month.
The usual wages and hours calculations are expected to follow a similar methodology as used for the Job Retention Scheme. In addition, employees will be able to cycle on and off the scheme and do not have to follow the same working pattern each month, but each short-time working arrangement must cover a minimum period of seven days.
It is the government’s intention that the employees will be informed by HMRC directly of the full details of any claim.
The employee will receive the following:
- Full pay for the hours worked.
- Up to two thirds of their pay for the hours not worked.
For example, John normally works 5 days per week and earns £350 per week. Due to reduced demand, her employer puts John on the Job Support Scheme, working 1 days per week (20% of his usual hours).
John will be paid £256.67 per week (73.3% of his normal pay), calculated as follows:
- £70 for the 1 day worked
- £186.670 for the days he does not work, being 2/3rd’s of his usual income for those days.
John’s employer will claim back £172.67 per week from the government under the scheme, meaning the cost to his employer is £14 per week for the hours not worked, plus the associated National Insurance and pension contributions.
JSS for Businesses that ARE required to close due to local lockdown restrictions
This scheme can be used where as a result of restrictions by one or more of the four governments in the UK, a business is legally required to close their premises. This will include premises restricted to delivery or collection only services from their premises.
Businesses must be instructed to and cease work for a minimum of 7 consecutive days and can only claim for employees who cannot work (paid or unpaid) for them.
If a business is required to close as a result of a specific workplace outbreak by local public health authorities, then they will not be able to use the scheme.
Under the scheme the employer will be able to claim a grant of two thirds of the normal pay for the employee up to a maximum of £2,083.33 a month. The usual wages calculations are expected to follow a similar methodology as used for the Job Retention Scheme.
When the premises are re-opened, the business can claim under the other JSS detailed above, if employees are not able to work their full hours, subject to the criteria for the scheme.
It is HMRC’s intention that the name of employers who have used the scheme will be published and; therefore, employees will be able to find out if their employer has claimed for them under the scheme.