As we draw towards the end of October we are finally seeing government support from the Coronavirus Job Retention Scheme ending. Over the last six months the scheme has provided support for employers to keep paying their workforce whilst the pandemic has meant dwindling revenues for businesses.
However, over the last few months this support has been tapering off and will stop completely at the end of the month.
Don’t worry though, the support will continue in the guise of the Job Support Scheme which replaces the CJRS we all know and love (sort of).
What support is available?
Under the new scheme, businesses will still be able to get monthly support for their payroll where employees are not able to work their normal hours. However, there are going to be some changes to the levels of support previously available and not everyone will be eligible to receive support through the scheme.
Who is eligible is going to become complex as the government have now confirmed that this will differ depending on whether your business has been required to close by law. If you are required to close by law you will have access to the more generous JSS Closed scheme, all other businesses may access the JSS Open scheme if they meet the basic eligibility criteria.
Both schemes are payable in arrears after you have paid your employees so consideration should be given to any cash flow issues this creates.
Which employers are eligible?
The basic criteria for an employer to be eligible for support has not changed from the CJRS. The two fundamental criteria are:
You must run a payroll scheme
You must have a UK, Channel Island or Isle of Man bank account
To access the Closed JSS, you must also have been required to close your premises by law. Only staff whose primary place of work has been closed by Coronavirus restrictions will be eligible for the Closed JSS. Further, the government has clarified that premises closed due to specific Coronavirus outbreaks do not fall within this scheme.
To access the Open JSS, the employer must have staff who are working at last 20% of their usual hours. Additionally, large employers (those with 250 or more employees on 23 September) must show that their turnover has remained equal or fallen during the pandemic. Smaller employers do not need to demonstrate this.
Which employees are eligible?
For an employee to be eligible under either scheme they must have been included in at least one PAYE submission between 6 April 2019 and 23 September 2020. They must also have been in employment on 23 September 2020. Employees may include people on zero hours or temporary contracts.
Under the Open JSS, the employee must have undertaken at least 20% of their usual hours.
How much support is available under the Open JSS?
Under the Open JSS, where an employee works less than their usual hours they will be paid 66.67% of the normal salary for the unworked hours. The normal salary is taken to be either the salary paid immediately before the 23 September 2020 or before 19 March 2020, whichever is higher.
The employer is able to claim 61.67% from the government using the scheme, up to a maximum of £1,541.75. This leaves the employer needing to pay a minimum of 5% contribution, which is mandatory.
The employer is allowed to top up the wages at their discretion. In addition, the employer must pay pension contributions and Employer NICS and this is not reimbursed under the scheme.
How much support is available under the Closed JSS?
Under the Closed JSS, where employees cannot work they will be paid 66.67% of their salary.
The employer is able to claim the whole amount from the government using the scheme, up to a maximum of £2,083.33.
Again, the employer is allowed to top up the wages at their discretion and must pay pension contributions and Employer NICS which are not reimbursed under the scheme.
What about the Job Retention Bonus?
Earlier in the year, the government announced that employers would receive a £1,000 bonus for each member of furloughed staff who were kept on between November and January 2021, receiving at least £1,560 across the three months. This will be paid in February 2021. This will still be available for employees who you claim for under the JSS.
What else do I need to think about?
As with the CJRS, employers will need to reach written agreement with their staff on the new working arrangements for the period. This must be available to support your claims should HMRC request it.
You should retain records relating to the claims including the calculation of the claim, evidence of the normal salary used, usual hours and worked hours.
As mentioned above the grant will be payable in arrears so companies should ensure they have sufficient cash to manage this.
The calculation of the claim, in particular normal salary and hours for variable or zero hours staff can be complex. There is further guidance published on the gov.uk website below and further guidance will be released before the end of October.
You should review your staff requirements and where necessary make sure agreements are in place should staff be required to work different hours
You should familiarise yourself further with the guidance on gov.uk
If required you should set up the necessary working papers to calculate the claims for November onwards
Should you need further advice or guidance please contact us to discuss your needs.