The new Job Support Scheme - What does it mean? - Make Sense
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The new Job Support Scheme – What does it mean?

The new Job Support Scheme – What does it mean?

The JSS starts on 1st November 2020 and will run for 6 months. It is intended to start once the Coronavirus Job Retention Scheme (CJRS) concludes on 31st October 2020. 

The JSS is open to all employers with a UK bank account and UK PAYE schemes. Large businesses, however, must complete a financial assessment test to prove that their turnover is lower now than before they experienced problems resulting from the coronavirus pandemic. SMEs (Small and medium enterprises) will not have to undergo a financial assessment. 

Large enterprises who qualify for the JSS will be expected not to make capital distributions whilst using the scheme. 

The JSS applies to all employees that fit the following criteria: 

  • They must be in viable employment from 1st November 2020 
  • No redundancy notice can be served on them whilst they are being paid under the JSS 
  • They must have been on the employer’s Real Time Information (RTI) submission to HMRC on or before 23 September 2020

To show that the work is viable, employees must work at least 33% of their “normal hours, this may be increased after 3 months of the JSS. Normal hours refer to the hours an employee worked before furlough, their current fixed hours or an average of their hours ithey do not work fixed hours and they were not placed on furlough. 

Employees can work more than 33% of their normal hours but not less. There is no maximum as the scheme was designed to help businesses who have had to reduce their employee’s hours due to a lower business demand resulting from the coronavirus pandemic. 

The working patterns can vary and employees can come off and on the scheme. However, each pattern of short term working (of at least 33% of the employee’s normal hours) must last at least 7 days. 

The employer will pay for the hours worked by the employee at their normal contractual rate. To qualify, the hours worked must be at least 33% of their normal working hours.  The remaining unworked hours are accounted for as follows: 

The Government will pay 33% of the value of the employee’s unworked normal hours up to a maximum of £697.92 per month.  The employer will also pay 33% of the value of the employee’s unworked normal hours but with no cap.  The final 33% of the employee’s unworked hours remain unpaid. 

This means that in cases where the employee is only required to work 33% of their normal hours, the employee will still receive at least 77% of their normal pay (save for in cases where the cap on Government’s contribution is applied).  That will equate to the employer paying 55% of the value of an employee’s normal hours and the Government paying 22% (although capped at £697.92 per month). 

See the table below for how payment of an employee on JSS will be split.

The scheme will trigger a reduction in pay and possible changes to an employee’s working hours. Employees should therefore consent to be paid and employed under the terms of the JSS. NI and pension contributions will be paid by the employer (unlike the previous CJRS where the Government paid this) 

The Government will not cover any contractual notice payments. This is because the scheme is designed to support the jobs of staff who are in employment with viable jobs, not those at risk of redundancy. 

The Job Retention Bonus can work alongside the JSS scheme. The Job Retention Bonus is payable to any previously furloughed employee, who remains employed until 31st January 2021.  

The payments will be made in arrears following a claim for a certain pay period after an RTI submission is made to HMRC. Payments will be made monthly and the HMRC will check claims. The grants can be used to reimburse wages already paid. 

If you need any help with your Limited company accounts and payroll or tax advice ‘You Know It Makes Sense’ to give me a call.

 

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