The Chancellor announced the launch of a new Job Support Scheme (JSS) as a successor to the Coronavirus Job Retention Scheme (CJRS). The objective of the scheme is to support the wages of people in work, giving businesses who face depressed demand the option of keeping employees in a job on shorter hours, rather than making them redundant.
The scheme has currently been postponed due to the extension of the CJRS and will run for a period of six months.
Overview of the JSS
When does the JSS start?
It was due to start on 1 November 2020 and last for 6 months, but has been postponed due to the extension of the CJRS.
Which employees qualify for the scheme?
Any employees on an employer’s payroll on or before 23 September 2020 and in respect of whom an RTI return must have been made to HMRC by that date. Unlike the CJRS second phase, no claims need to have been made previously in respect of qualifying employees. However, employees serving redundancy notice periods will not qualify.
Which employers qualify?
The scheme is aimed principally at SMEs, but large employers may qualify if it can be demonstrated that their turnover has been adversely impacted by the Coronavirus Crisis.
How many hours do employees need to work to qualify?
At least one-third of their normal working hours, although there is the provision for this threshold to be increased from month 4 of the scheme onwards. Payment must be made to employees at their usual pay rate.
What does ‘normal working hours’ mean?
It has a similar definition to that used under CJRS.
Is there a minimum period over which normal hours can be considered?
Periods shorter than 7 days cannot be used, but longer periods can be considered.
How much support will government provide?
Up to half of the top-up pay of qualifying employees for periods when those employees are not working, up to a maximum of £697.92 per month.
Will the government contribute to national insurance and pension payments?
No, these will be met by the employer.
Is there a minimum amount that an employee will receive?
Yes, an employee working one-third of normal hours, would expect to receive 77% of their normal salary.
This is all quite confusing, is there a ready-reckoner available for percentages of salary payable by an employer and the government?
This table may help:
| Worked | 33% | 40% | 50% | 60% | 70% |
| Not working | 67% | 60% | 50% | 40% | 30% |
| Percentage of normal pay: Employee earnings |
77% | 80% | 84% | 86% | 90% |
| Gov’t grant | 22% | 20% | 17% | 13% | 10% |
| Employer cost | 55% | 60% | 67% | 73% | 80% |
How will payments to employees work?
Employers will pay employees the full amount of the entitlement in the first instance, e.g. for an employee working 33% of their normal hours, 77% of their normal pay. The employer will then make a claim to government for its proportion, in this example, 22% of normal pay.
The next step
At UHY we have a number of advisers who are well used to dealing with the employment taxes part of HMRC.
If you would like to discuss the support we can provide for your business during this difficult time, please contact your usual UHY adviser or complete the contact form.