Job Support Scheme Revision

Coronavirus, Payroll,

As the feared ‘Second Spike’ seems closer than ever, and enhanced restrictions seem inevitable, Chancellor Rishi Sunak has announced changes to the new Job Support Scheme (JSS) for businesses forced to close as part of local or national restrictions.

The Government will pay two thirds of the salary of the employees’ salaries for businesses forced to close. This is more generous than the Job Support Scheme that was announced. The employer will have to find this cash before reclaiming it from the Government, and will have to cover any employers National Insurance contribution and employers pension contribution.

Furlough Scheme 3.0

As part of the new announcements, Sunak gave details of a new variation to the previous scheme. This is intended to form part of an ‘economic toolkit’ to give businesses ‘the right support at the right time’.

To be eligible, employees must be furloughed for periods of at least 7 days at a time. During this time they will receive 66% of their usual wages. They must have been on the payroll, and included in an RTI Return, before 23rd September 2020.

The employer will need to pay the employees wages upfront, together with any Employers NIC and the minimum pension contribution on those wages. The employer can then reclaim the cost of the wages paid from HMRC but not the NIC or pension contributions. The claim amount is capped at £2,100 per employee per month.

The employee must give up one third of their wages, and will have to confirm their agreement to this in writing. We’d strongly recommend that you speak to your HR advisor to ensure you are adhering to the terms of your contracts and the new guidance on this one!

When will the refund come through?

The online portal to reclaim under the JSS will not open until 1st December 2020, so there may well be a funding gap for employers between paying staff and recovering the cash. The claim will need to be supported by an RTI return that confirms payments have already been made to staff. This is due to the fraud experienced as part of the original Job Retention (Furlough) Scheme.

How long will the scheme run?

The scheme starts on the 1st November 2020 and is due to close on the 31st March 2021, but will be reviewed in January 2021. It is available to all businesses forced to close by regulation, so includes those where devolved governments close hospitality and related businesses by law. In this case the UK Government will cover the costs of the wages, as above.

HMRC Fact Sheet (added 15th October 2020)

HMRC have published a Fact Sheet that outlines more detail of the scheme. You can find that here.

Job Support Scheme

This new enhancement for local lockdowns should not be confused with the recently announced Job Support Scheme. Under this scheme, the Government only contributes up to 22% of the usual wages and £697.22 per month. You can find out more about this scheme here.

Job Retention Bonus

Business bringing back previously furloughed employees that are retained until the end of January 2021 can also qualify for £1,000 per employee. Find out more here.

 

The Chancellor also announced changes to the Local Lockdown Grants. Find out more here.

Given the ongoing, seemingly constant developments around the health implications of Coronavirus, it’s not surprising that the support measures are evolving too. That said, it is hard to keep up with them all!

We’ll continue to get as much information out through our website and our regular client updates, but if you’re unsure about what you may be eligible for, or how to claim please do get in touch.

Please also be sure to double check any employment decisions with your HR advisor; no-one needs to be batting a tribunal on top of everything else! If you need an introduction to an advisor with a practical approach, please let us know.

 

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