Particularly with very recent developments and announcements concerning COVID and business restrictions, the Chancellor was expected to deliver some form of replacement for the furlough scheme for businesses hardest hit by continuing restrictions in operations.
It was welcome news that the Job Support Scheme (JSS) is in fact open to all small and medium-sized businesses, with only larger businesses required to undertake a financial assessment to show a negative impact from COVID in order to take advantage of the scheme. The JSS is designed to protect viable jobs in businesses facing lower demand over the winter months due to COVID-19, to help keep their employees attached to the workforce.
- under the JSS, the Government will pay a third of hours not worked (up to a cap of £697.92 a month), with the employer also contributing a third (employer’s NI and pension contributions cannot be reclaimed)
- to be eligible, employees must have been on an employer’s PAYE payroll with a Real-Time Information submission notifying HMRC of payment to that employee made on or before 23 September 2020 (there is no requirement that the employee has been previously furloughed)
- the scheme will open on 1 November 2020 and run for 6 months until April 2021
- claims can be made monthly from December 2020
- in the first 3 months of the scheme, employees must work at least 33% of their usual hours (the Government has flagged that it will consider raising this minimum threshold after 3 months)
- employees can cycle on and off the scheme and can change working patterns, but each short-time working arrangement must cover a minimum period of seven days.
Whilst the detailed guidance is yet to be issued, like its predecessor the furlough scheme, the JSS will inevitably be complex to administer for businesses and payroll teams alike. Keen to avoid the level of fraud they believe has been perpetrated through the furlough scheme, HMRC have indicated that they will check claims and inform employees directly of full claim details. Employers should keep written notifications to employees of all changes in short-time working arrangements as evidence which can be made available to HMRC if required.
These additional points are worth noting at this stage, particularly when considering whether or how to utilise the scheme:
- employees can’t be made redundant or put on notice of redundancy during the period within which the employer is claiming the JSS grant for that employee
- it’s also expected that employers won’t be allowed to top up their employees’ wages above the two-thirds contribution to hours not worked, and
- there is specific mention that large employers using the JSS will not be expected to make capital distributions such as dividend payments or share buybacks whilst accessing the grant, which implies that these restrictions won’t apply to SMEs, but the detailed guidance will provide confirmation.
Our payroll team are awaiting further JSS detail from the Government and will be able to help you with any queries, just get in touch with your usual Sagars contact or our payroll manager, Andrew Senior.
Winter Economy Plan
Alongside launching the JSS, the Chancellor’s Winter Economy Plan included extensions to the Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) and the Future Fund. Read what we know about this and the new repayment measures in Paul Lodder’s loans blog. And finally, there were some welcome changes for the self-employed, VAT registered businesses and those paying tax through self-assessment, which you can read about in Kate Naylor’s tax blog.
Our COVID-19 hub is full of guidance and advice about the various measures that you might be able to benefit from and our team are happy to help you with any queries, just get in touch with your usual Sagars contact or call our office on 0113 297 6789.