The Job Support Scheme explained
The Job Support Scheme (JSS) is replacing the Coronavirus Job Retention Scheme (CJRS) which ends on 31 October. This new scheme will run for 6 months from 1 November 2020. The intention of the government is to support the income of people in work, allowing employers to keep their employees on fewer hours rather than make them redundant.
What does the grant cover?
The Job Support Scheme is somewhat more complicated than CJRS as employees will only be eligible for the scheme if they work at least 33% of their usual hours. For each hour not worked, the employer and the government will each pay one third of the employee’s usual pay, although the government’s contribution will be capped at £697.92 per month.
This means that employees eligible for the Job Support Scheme and enrolled by their employer will receive at least 77% of their usual pay (dependant on the pay cap from the government).
The government contribution will not cover Class 1 National Insurance or pension contributions and the employer will be reimbursed in arrears for the government’s contribution.
“Usual wages” calculations will follow a similar methodology as for the Coronavirus Job Retention Scheme. Further details will be set out in guidance being announced shortly. The pay for employees who have previously been furloughed, will be calculated on their usual pay and/or hours and not the amount they were paid whilst on furlough.
Who is eligible?
The scheme is open to all small and medium sized businesses (stipulated as having fewer than 250 staff), with a UK bank account and UK PAYE scheme. Larger businesses with over 250 employees will only be eligible if they can prove that turnover has fallen during the coronavirus pandemic and meet a financial assessment test.
The scheme will cover all employees whether they have previously been furloughed or not. Employees must be on an employer’s PAYE submissions 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.
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.
Unlike the CJRS, the new Job Support Scheme is not available to employees under notice of redundancy.
How can I claim?
The scheme will be open from 1 November 2020 through 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 on a monthly basis.
Grants will be payable in arrears, meaning that a claim can only be submitted in respect of a given pay period, after the payment to the employee has been made and that payment has been reported to HMRC via an RTI return.
HMRC will be checking 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.
For more information here is the JSS downloadable factsheet link
Job Support Scheme pay calculator
The scheme has been expanded to support businesses that have or may be required to close as a result of local or national coronavirus restrictions, read our post on the expansion here:
If you have any questions regarding the Job Support Scheme or its expansion please get in touch with your Swindells’ partner who will be able to advise you further.
What is IR35 and does it apply to you?
IR35 describes two sets of legislation that HMRC has designed to combat what they consider to be tax avoidance by workers and the firms hiring them. HMRC maintains that these workers supplying their services to clients via an intermediary such as a limited company, are actually employees and so should be taxed as such
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