The Job Support Scheme has been introduced to safeguard jobs that are crucial but facing lower demand in winters due to COVID-19. As a result, people who wish to work can do so but with shorter work hours, without being made redundant and earn a minimum of 77% of their normal wages.

It may also be pertinent to mention that employers using the Job Support Scheme will also be able to claim the Job Retention Bonus provided they fulfil the eligibility criteria.

What is the eligibility criteria for employers?

Employers possessing a UK bank account and UK PAYE schemes are eligible for the grant.

Employers or employees are not required to have utilized the Coronavirus Job Retention Scheme in the past to be eligible for this scheme.

At the same time, large businesses need to meet a financial assessment test to make the scheme available to only those whose turnover has decreased due to the coronavirus pandemic.

However, it is expected that large employers using the Job Support Scheme will not make capital contributions like dividend payments or share buybacks though this grant.

What is the eligibility criteria for employees?

Employees must be on an employer’s PAYE payroll on or before 23 September 2020 to be eligible for this scheme.

This means that a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020.

The employee is required to work for at least 33% of their usual hours for the first three months of the scheme. After a period of 3 months, the Government will decide if it wants to increase this minimum hour threshold.

The workers do not need to work in the same pattern each month and can opt in and out of the scheme.

However, a minimum period of seven days must be covered for each short time working arrangement.

How much can employers claim?

The employers can make the claim for a grant equal to the cost of one third of hours not worked up to a cap of £697.92 per month.

The cost of a further one third of hours not worked must be borne by the employers.

Additionally, the grant payments will be made in arrears which will reimburse the employer for the Government’s contribution.

However, it is important to note that the grant will not cover Class 1 employer NICs or pension contributions and these will have to be paid by the employers themselves.

Employers must also pay contracted wages to their employees for hours worked, and the Government and employer contributions for hours not worked.

How and when can employers apply for the grant?

Employers can make a claim online through GOV.UK from December 2020 and this will be paid monthly.

The scheme will be open from 1 November 2020 to the end of April 2021.

Please note that the grant will be payable in arrears. This means 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.

Are there any other restrictions imposed by HMRC on employers who will use this scheme?

Employers need to agree to the new short-time working arrangements with their staff, make any changes to the employment contract through agreement and may also notify the same to the employee in writing. This agreement must be made available to HMRC upon request.

Please note that HMRC may also check claims made by employers.

In case a claim is found to be fraudulent or has any inaccurate details, the HMRC will either withhold or ask the released amount to be paid back.

The grant must only be used as reimbursements for wage costs actually incurred.

HMRC is also expected to inform employees directly regarding the full details of the claim.

Has the government announced any support for businesses whose premises have been legally required to close as a direct result of coronavirus restrictions?

Yes. The government has announced an expansion of the JSS to provide temporary support to such businesses.

Under this support, grants will be given to the affected businesses towards the wages of employees who have been instructed to stop working.

Businesses legally required to provide only delivery and collection services from their offices or close their offices will be covered under this expansion too due to limitations imposed by one or more of the four governments of the UK.

The government will pay two thirds of employees’ wages, up to a maximum of £2,100 per month. While employers will be required to cover employer National Insurance and pension contributions, they will not be required to contribute towards wages.

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Lanop Accountants and Tax Advisers for Small and Medium Businesses

We are your local Chartered Accountants and Tax Advisers based in Putney, Harley Street and Battersea. We are expert XERO Accounting advisors and trusted business advisors in Wandsworth Borough.

While we are based in South West London and Central London, our clientele is quite global and our staff is currently working remotely to serve our clients through active Zoom accounts all over UK.

As always, you can reach out to us anytime to discuss any financial issues you may have in this coronavirus pandemic.

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