Smarter accounting

Job Support Scheme Update

22 October 2020, Charities, Companies, Creative Industries, Employer, General, Sole Traders

What changed with the Job Support Scheme update?

The Job Support Scheme update (JSS) announced by Rishi Sunak today (22nd October) reduces the costs for employers and also reduces the minimum hours for workers to 20% compared to 33% previously.

The Job Support Scheme provides support from three sources

The UK Government will issue further guidance shortly, but for the moment, here is what we know.

What is the minimum an employee must work?

For the first three months of the scheme the employee must work at least 20% of their usual hours.  The original plan was to review this after 3 months.  The scheme has already changed before it started so expect further changes over the coming months.

Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month.  Each short-time working arrangement must cover a minimum period of seven days.

What does it mean to be on reduced hours?

When originally announced, the JSS – which will come into effect on 1 November – saw employers paying a third of their employees’ wages for hours not worked, and required employers to be working 33% of their normal hours.

Today’s announcement reduces the employer contribution to those unworked hours to just 5%, and reduces the minimum hours requirements to 20%, so those working just one day a week will be eligible. That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.

Is the scheme linked to furlough funding?

The Job Support Scheme follows the closure of the Coronavirus Job Retention Scheme, but there is no direct link between the two schemes.  Neither the employer nor the employee needs to have previously been part of the Coronavirus Job Retention Scheme.

Whether or not you have furloughed staff, you may be eligible for the Job Support Scheme.

Employer eligibility

All employers with a UK bank account and UK PAYE schemes can claim the grant.

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 experiencing difficulties from Covid-19.  Large employers using the Job Support Scheme must not make capital distributions, such as dividend payments or share buybacks, whilst accessing the grant.  Further details will be set out in guidance.

There will be no financial assessment test for small and medium enterprises (SMEs).  This means SMEs do not have to prove reduced turnover due to the Coronavirus.

What about new employees?

Employees must be on an employer’s PAYE payroll and reported to HMRC on or before 23rd September 2020.  This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23rd September 2020.

Can I top up my employee wages?

The original guidance from HMRC stated that “Our expectation is that employers cannot top up their employees’ wages”.  We are getting mixed messages on topping up wages so we need to wait for further guidance.  The UK Government will be working on writing the detailed guidance, but the publishing date for this will be later than originally planned with today’s Job Support Scheme update.

Can I make employee redundant while they are on the Job Support Scheme?

You may apply to the JSS if redundancies are a possibility, but you can’t claim a grant for any employee who is in the process of being made redundant or has been given a redundancy notice.

How long will the Job Support Scheme Last?

The Job Support Scheme will open on 1st November 2020.  It is currently scheduled to cease on 30th April 2021.

How do I make a claim?

Employers will be able to make a claim online through from December 2020.  Claims will be processed and 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 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.

Do I need to tell my employee if they are on the Job Support Scheme?

Employers must

  1. agree any new reduced hours working arrangements with their staff
  2. make any changes to the employment contract by agreement, and
  3. notify the employee in writing.

This agreement must be made available to HMRC on request.


Website by Haiwyre