The Job Support Scheme: A Closer Look

Amidst heightened restrictions, the government’s Job Support Scheme will open in November 2020. It will serve as an indirect replacement for the Job Retention Scheme, which closes at the end of October. According to the government, the Job Support Scheme will ‘protect viable jobs in businesses facing lower demand due to COVID-19.’ We’ve taken a look at the scheme in more detail.

The Job Support Scheme

Depending on your business’s circumstances, the Job Support Scheme provides different levels of support.

The Job Support Scheme Open

Under the Job Support Scheme Open:

• To qualify, the minimum hours an employee is required to work is 20% (1/5).
• As an employer, your contribution towards all ‘non-worked’ hours is 5% (up to a cap of £125 per month).
• The government will pay up to 49% of overall wages. That’s up from 22% when the scheme was originally announced.
• For employees, this means that if they work 20% of their normal hours, they’ll receive at least 73% of their normal wages.

For businesses, eligibility criteria is more stringent than it was for the furlough scheme.

• Small and Medium Sized businesses qualify automatically.
• Only larger businesses whose turnover has ‘stayed level or decreased’ can apply. Though, said businesses will have to meet a ‘financial impact test’.
• Furthermore, as an employer, you must have agreed – in writing – with your employee (or their union) the temporary working arrangement for shorter hours.

The Job Support Scheme will be open for six months, applying to wages paid between November 1^st 2020 and April 30^th 2021 only. The ‘minimum working time percentage’ (20%) will apply for the first three months of the scheme (November to January). This threshold may increase from February onwards. For an example of how this will work in practice, click here.

The Job Support Scheme Closed

The Job Support Scheme Closed supports those businesses forced to shut as a result of tier 3 (or, ‘very high’) restrictions. In this instance, the government pays 67% of a workers’ usual wages (to a maximum of £2,083.33 per month). This model does not require any contribution from the employer towards their workers’ wages, though they must still make pension and National Insurance contributions in full.

Furthermore, the employee does not have to work a minimum number of hours to qualify.

If eligible, you’ll receive the Job Support Scheme grant once per month (per employee). If you’re making a claim under the JSS Open, you must make sure you’ve paid your employee first.

The scheme is available for any employees who were included on your company’s payroll on or before September 23^rd 2020 (providing the ‘working hours conditions’ are met for each employee you claim for) regardless of how long they were with you before that date. However, you cannot submit a claim for any employees you have made redundant, or who are on notice for redundancy.

As with the Job Retention Scheme, Job Support Scheme (both Open & Closed) claims will be checked/reviewed by HMRC, and payments may be withheld or recovered if a claim is false. In the meantime, there’s more information on the Job Support Scheme, here.

Job Retention Bonus

Announced earlier in the summer, the Job Retention Bonus is a taxable, one-time, £1,000 payment. It is available to UK employers who keep their furloughed staff in employment until at least the end of January. Employers can make a claim for any eligible, furloughed employees they’ve brought back from furlough (before November 1^st) and kept in continuous employment until January 31st 2021.

This bonus is only available between February 15^th and March 31^st 2021, and does not have to go to employee/s. Furthermore, if you make use of the Job Support Scheme, you will still be able to claim the Job Retention Bonus – if eligible. There’s more information on the Job Retention Bonus, here.

Business Grants

Mr Sunak has also announced cash grants of up to £2,100 per month for businesses which are being impacted by tier 2 (‘high-alert level’) restrictions – particularly those in adversely affected industries such as hospitality, accommodation and leisure.

Meanwhile, business grants of up to £3,000 per month are available for companies in tier 3 (‘very-high-alert level’) areas, such as Lancashire, Greater Manchester, South Yorkshire, and the Liverpool City Region.

The Self-Employed Income Support Scheme

In his initial Winter Economy Plan speech, Mr Sunak announced a scaling back of the Self-Employed Income Support Scheme, in that the grant would only cover 20% of average monthly trading profits.

In October, though, he announced that a taxable grant – paid in a single instalment at the start of November – will instead cover 40% of average monthly trading profits (limited at £3,750). It will cover three months’ worth of profits, with a second grant then covering the three-month period from the start of February until the end of April 2021.

To be eligible, more than half of your income needs to come from self-employment.

The scheme is open to those with trading profits of less than £50,000 in 2018-19, or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19. Unfortunately, those who are newly self-employed will not receive any help under this particular scheme. Read more, here.

Further Support

Other, existing measures of COVID-19 ‘support’ include:

• The cancellation of any VAT increase for the tourism and hospitality sectors (currently at 5%) – until March 2021.
• Repayment extensions for VAT deferrals. Plus, a host of business loan schemes, including Bounce Back Loans and the Business Interruption Loan Scheme.

If you have a question about any of the issues discussed above, speak to your Personal Accountant today. Or, for more information on how Danbro Accounting can help your business, get in touch at hello@danbro.co.uk.