HMRC issued Job Support Scheme factsheet

25 September 2020

Chancellor, Rishi Sunak, announced a new support scheme that will be implemented as the Coronavirus Job Retention Scheme (CJRS) closes at the end of October.

The Job Support Scheme (JSS) has been initiated to help protect viable jobs in businesses who are facing lower demand over the coming winter months due to Covid-19. The intent is to help their employees remain in employment, and to reduce the amount of possible redundancies due to the current pandemic. Employers will be expected to continue to pay employees for their time worked, however the cost of hours not worked will be split between the employer and the Government (via the JSS) and the employee (via a wage reduction) resulting in the employee being kept in employment.

Those employers who utilise the JSS will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.

As the CJRS closes, the JSS will open on 1 November 2020 and will run for six months, closing in April 2021. HMRC has advised that further guidance will be published shortly, however, they have advised some key details in the form of a Factsheet, which includes:

Who is eligible?

Employers

  • All employers with a UK bank account and UK PAYE schemes can claim the grant
  • The employer does not have to have used the CJRS to be eligible to claim
  • Large businesses will have to meet a financial assessment test, so the scheme is only available to those whose turnover is lower now than before, due to experiencing difficulties caused by Covid-19. There will be no financial assessment test for Small and Medium Enterprises (SMEs)
  • The expectation is that large employers using the JSS will not be making capital distributions, such as dividend payments or share buybacks, whilst accessing the grant. Further details will be set out in guidance

Employees

  • Employees must be on an employer’s PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020
  • To support viable jobs, for the first three months of the scheme the employee must work at least 33% of their usual hours. After three months, the Government will consider whether to increase this minimum hours threshold
  • Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short time working arrangement must cover a minimum period of seven days

What does the grant cover?

  • For every hour not worked by the employee, both the Government and employer will pay a third each of the usual hourly wage for that employee. The Government contribution will be capped at £697.92 a month
  • Grant payments will be made in arrears, reimbursing the employer for the Government’s contribution. The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer
  • “Usual wages” calculations will follow a similar methodology as for the CJRS. Full details will be set out in guidance shortly. Employees who have previously been furloughed will have their underlying usual pay and/or hours used to calculate usual wages, not the amount they were paid whilst on furlough
  • Employers must pay employees their contracted wages for hours worked, and the Government and employer contributions for hours not worked. The expectation is that employers cannot top up their employees’ wages above the two-thirds contribution to hours not worked at their own expense

What does it mean to be on reduced hours?

  • The employee must be working at least 33% of their usual hours
  • For the time worked, employees must be paid their normal contracted wage
  • For time not worked, the employee will be paid up to two-thirds of their usual wage
  • Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee

How can I claim?

  • The scheme will be open from 1 November 2020 to the end of April 2021. Employers will be able to make a claim online through Gov.uk from December 2020. They will be paid monthly
  • Grants will be payable in arrears meaning that a claim can only be submitted in respect of a given pay period, after payment to the employee has been made and that payment has been reported to HMRC via an RTI return

 HMRC checks

  • HMRC will check claims. Payments may be withheld or need to be paid back if a claim is found to be fraudulent or based on incorrect information. Grants can only be used as reimbursement for wage costs actually incurred
  • Employers must agree the new short time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request
  • The intention is that employees will be informed by HMRC directly of full details of the claim

Included in the Factsheet, HMRC provide a detailed example, along with a table which shows percentages in relation to the government funding, based on hours that have been worked.


Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information. 

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