This article was last updated on 2 November 2020.
The Chancellor was coming under increasing pressure to find some sort of continuation of the furlough support that was originally due to close on 31 October 2020, but has now been extended.
Two measures have been announced. The Job Support Scheme is designed to support viable jobs in businesses that face a lower demand due to Covid over the coming months. The Job Support Scheme is in addition to another measure previously announced – the Job Retention Bonus Scheme .
Since its original announcement several changes have been made to the scheme. This information is correct as of 2 November 2020.
For eligible employees both the Job Support Scheme and the Job Retention Bonus Scheme may apply, thus giving much needed support.
Another important point to note is that employees do not have to have been previously furloughed in order to potentially qualify for enrollment.
What period does the support apply to?
The Job Support Scheme was originally scheduled to commence on 1 November 2020 and last to 30 April 2021.
The Job Retention Scheme has now been extended to provide support during the second national lockdown, which at this time is anticipated to finish on 2 December. During the lockdown the Job Retention Scheme is expected to cover 80% of employees’ wages for hours not worked.
The expectation is that the Job Support Scheme will commence once the Job Retention Scheme has ceased.
What companies can benefit?
The scheme is open to all small employers (and some large employers) with a UK bank account and PAYE scheme – regardless of whether they used the furlough scheme previously or not.
Which employees can you enrol?
You can enrol employees who
- have been reported to HMRC as on the business’s payroll on or before 23 September 2020
- work at least 20% of their usual hours in the first three months of the scheme – if the business is not legally required to close due to Covid restrictions. This threshold will be reviewed for the second three months
- work a minimum of seven consecutive days in this short time working arrangement pattern
- are not on notice of redundancy during the period the support is being claimed for
- have agreed in writing to the temporary working arrangement
What will be the employer’s cost?
This will depend on whether the business is able to remain open, or if the business is legally required to close due to Covid restrictions.
For businesses that can remain open (JSS Open), employers will need to
- pay employees for the hours worked
- pay 5% of the employee’s usual pay for hours not worked (max £125 per employee per month)
- cover the cost of the associated employer NI and pension costs for the above as well as the government’s contribution to the employee’s wages.
For businesses that are legally required to close (JSS Closed), employers will need to
- cover the cost of the associated employer NI and pension costs for the the government’s contribution to the employee’s wages
The impact of the employer NI and pension costs will vary between each client, so please contact us to discuss how this will affect you.
Can the employer top up employees wages at their own expense?
Although originally HMRC did not permit employer top-ups of the scheme, they have now stated that employers will be permitted to top up employees wages at their own expense.
What will the government contribute?
This will depend on whether the business is able to remain open, or if the business is legally required to close due to Covid restrictions.
For business that are able to remain open (JSS Open), the Government will contribute 61.67% of the employee’s usual pay for hours not worked, subject to a cap of £1,541.75 per month.
For businesses that are legally required to close (JSS Closed), the Government will pay 2/3rd of the employee’s usual wages, subject to a cap of £2,083.33 per month.
How will claims be made?
Claims can made retrospectively on a monthly basis via HMRC’s online portal. The first claim may be made on or after 8 December 2020.
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