On Friday 9 October 2020, the Chancellor, Rishi Sunak, unveiled additional plans to partially subsidise the wages of employees, to prevent a wave of redundancies following the cessation of the furlough scheme, and to ensure businesses are able to reopen once local restrictions are lifted.
Under the Job Support Scheme (JSS) expansion, grants are available to businesses whose premises are required – by law – to close as a direct result of the Government’s Coronavirus restrictions. It is hoped the new expansion scheme provides greater continued support for struggling firms, particularly those in the hospitality sector.
What is the new scheme?
The new JSS expansion, launching on 1 November 2020, replaces the furlough scheme, which closes entirely on 31 October 2020. It provides ongoing support to businesses who are required to close by law due to Coronavirus restrictions. The JSS expansion scheme, like the JSS, will be in place for 6 months from 1 November 2020, subject to a review in January 2021.
Which businesses can access the new scheme?
The new scheme is only accessible to businesses that are forced by law, as a result of local or national lockdown restrictions, to close to stop the spread of Coronavirus. Businesses restricted to delivery or collection only services are also able to access the funding.
Employers must be instructed to close and cease work for a minimum of 7 days to qualify for the new expansion scheme.
Employers must hold a UK bank account and have a UK PAYE scheme registered on or before 23 September 2020. Employees included in a claim must have been included on an RTI submission made to HMRC before 23 September 2020.
When Coronavirus restrictions allow businesses to reopen, they can claim under the JSS scheme for employees who are working reduced hours due to reduced demand, and the JSS expansion scheme cannot be claimed at that point.
Individual businesses required to close as a result of specific workplace outbreaks are not eligible for this scheme.
What will the Government pay, and what does my employer pay?
Eligible employees will get 67% of their normal pay paid by the Government, up to a maximum of £2,100 a month. Further details on how normal pay is calculated will be published in due course.
Employers are expected to pay the associated pension and National Insurance (NI) costs; those costs cannot be claimed from the Government. Deferment arrangements with HMRC for remitting the monthly PAYE tax/NIC deductions will not be available for PAYE tax/NIC relating to payments made under the scheme.
Employers are not required to top up pay and pay the additional 33% of wages to employees. This is at the discretion of each business.
In line with the JSS, employees do not previously need to have been paid under the CJRS to qualify for this scheme.
An employee cannot be made redundant or put on notice of redundancy during the period within which the employer is claiming a grant for that employee.
Can I use the grant for other costs associated with my business, such as rent?
The entire grant must be used to cover the employee’s wages.
How long is the scheme accessible for?
The scheme is set to run for six months from 1 November 2020, but will be reviewed in January 2021.
As an employer, how do I claim the JSS expansion grant? Can I claim immediately?
In line with the JSS, claims for the Government’s contribution must be made in arrears, on a monthly basis, online through gov.uk. The first claim can be made in December 2020 for November payroll claims.
Claims cannot overlap, and must be made monthly in arrears.
HMRC will check claims, and payments may be withheld, or be required to be paid back, if it is found that the claims made are fraudulent or incorrect.
Employers must agree in writing with employees the working arrangements under this scheme, all changes to working hours are a contractual change which must be confirmed in writing. HMRC may ask to see evidence of this written confirmation.
HMRC intend to publish the names of employers who have used the scheme, and employees will be able to find out if their employer claimed for them under the scheme.
Your local Employment Tax experts, here to help
Our team of Employment Tax specialists are on hand to help employers access the necessary funding whilst providing pragmatic solutions to help you navigate the coming months.
If you have any questions or concerns regarding the new scheme, or any other Employment Tax issues, please do not hesitate to get in touch.