Key points on the recent announcement of financial support for businesses and the protection of jobs
Job Support Scheme
A new Job Support Scheme (JSS) will run from 1 November 2020 for 6 months until 30 April 2021. The scheme has been introduced to help protect jobs that are still viable despite the downturn due to Covid-19. There are now two variations of the scheme, these are JSS Open and JSS Closed.
- JSS Open
JSS Open is in place to provide support to businesses that are open but where employees are working shorter hours due to reduced demand. To qualify for support the employee will now be required to work at least 20% of their usual hours. Due to this being a short-time working arrangement the reduced hours will need to be agreed between the employer and employee.
The employer will continue to pay the employee for the actual hours they have worked, and the government will pay a contribution of 61.67% of the usual pay for hours not worked up to a maximum of £1,541.75 per month. The employer will pay 5% of the usual pay for hours not worked up to a maximum of £125 per month, the employer can pay more if they wish. This will result in the employee receiving at least two thirds of their usual pay for hours not worked.
The caps are reduced according to the proportion of hours not worked. The grant does not cover the employer national insurance or pension costs to the employer.
Employers using the open scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.
- JSS Closed
The closed scheme will provide support to businesses whose premises are legally required to close as a direct result of restrictions by the government. Businesses that are restricted to delivery or collection services or restricted to outdoor food/drink services are eligible for this scheme.
Under JSS Closed scheme the government will fund two thirds (66.67%) of the usual wages of the employee for time not worked, up to a maximum of £2,083.33 per month. The employer will not be required to make a contribution but can choose to top up the payment should they so wish. The employer will still be responsible for the employer national insurance and pension costs.
- Both Schemes
Claims will be in arrears and employers can make their first claim from 8th December 2020 which is to cover periods ending and paid in November. Any grants claimed must be paid over to the employee and you cannot claim under the scheme if you have given the employee notice of redundancy.
Eligible employers and employees do not need to have been on the Coronavirus Job Retention Scheme to apply for grants under the JSS. However, the employee had to be on the payroll on or prior to the 23 September 2020. If the company is considered to be a large employer, they will need to demonstrate that they have been adversely impacted by Covid-19.
Job Retention Bonus
Employers who furloughed employees and made a claim under the Coronavirus Job Retention Scheme will be able to claim a one-off payment of £1,000 for every eligible employee. The employee will have to have remained continuously employed until at least 31 January 2021.
Employers will be able to claim the bonus once they have submitted PAYE Information for the period 5 February 2021 on time. The period that claims can be made will run from between 15 February to 31 March 2021. Further guidance on how the claim process will work is expected to be issued by the end of January 2021.
This bonus is for the employer and does not have to be handed over to the employee.
SEISS to be extended
The Self-Employment Income Support Scheme (SEISS) will now be extended until 30 April 2021 for individuals who are actively continuing trading but are experiencing reduced demand or temporarily cannot trade. If you were eligible for the previous two grants under SEISS an individual will be eligible for the grants under the extended scheme.
The first grant under the extension of the scheme will cover the period from 1 November 2020 until
31 January 2021. It will be a taxable grant to cover 40% of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £3,750 in total.
An additional second grant under the extension, will be available for self-employed individuals to cover the period from 1 February to 30 April 2021. HMRC have stated that they will be reviewing the amounts and eligibility for this second grant and will issue further advise in due course
Business in the hospitality and leisure sectors within areas on high alert level areas which are not legally closed but which are severely impacted by the restrictions on socialising may be eligible for a grant via their local authority. If you operate via business premises in an area that is on high alert level and is impacted please contact the local authority.
Please feel free to contact us if you have any questions or require assistance in any way.