HM Revenue & Customs (HMRC) has published further details relating to the Job Support Scheme (JSS), announced by the Chancellor during his Winter Economy Statement in Parliament on 24 September.
The JSS is intended to support those businesses likely to have to contend with reduced demand over the winter as a result of the Coronavirus crisis, helping to keep employees in ‘viable’ jobs on short-time working.
The scheme will launch on 1 November 2020 – the day after the Coronavirus Job Retention Scheme (CJRS) closes – and will run for six months until the end of April 2021.
It will be open to all SMEs but will only be available to large businesses that can evidence the fact that they have been adversely affected by the Coronavirus crisis, through lesser revenues.
Large businesses will be expected not to make capital distributions, including dividends or share buybacks, while using the JSS.
Employees claimed for through the JSS must have been present on an employer’s PAYE payroll on 23 September 2020, meaning their employer must have included them on an RTI submission on or before that date.
Furthermore, they cannot be on notice of redundancy or be made redundant whilst in receipt of the JSS.
Employees must work at least 33 per cent of their usual hours and be remunerated in full for those hours, by their employer.
The employer must also then pay one-third of the hours not worked – an amount which will be matched by the Government up to a cap of £697.92 a month.
Employees will then forego pay for one-third of the usual hours that they are not working. This means they will receive at least 77 per cent of their usual wages, even if they are only working 33 per cent of their usual hours.
Employers, meanwhile, would pay a total of 55 per cent of an employee’s usual wages in return for 33 per cent of their usual hours.
If you are thinking about utilising the job support scheme, it may also be worth considering the current structure of your workforce and your staffing requirements moving forward, to ensure you are operating cost-effectively.
HMRC has published a table, setting out how the scheme will operate at different levels of short-time working:
|Hours Employee Worked||33 %||40 %||50 %||60 %||70 %|
|Hours Employee Not Working||67 %||60 %||50 %||40 %||30 %|
|Employee Earnings||78 %||80 %||83 %||87 %||90 %|
|Gov’t Grant||22 %||20 %||17 %||13 %||10 %|
|Employer Cost||55 %||60 %||67 %||73 %||80 %|
Employers will need to agree short-time working arrangements with staff affected and make any necessary changes to contracts of employment, with documents available to HMRC upon request.
HMRC says that it also intends to notify employees directly with full details of the claims made in respect of them.
How can George Hay help?
Our advisers can help you to anticipate and plan for the closure of the existing furlough scheme and the start of the JSS. If you consider that you intend to participate in the new arrangement, we can discuss with you what this will mean for your cash flow and assist you with navigating the requirements of the scheme.
We will continue to monitor further developments and update you accordingly. To speak to one of our team about the upcoming changes, contact us today.