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Accountancy  •  Bookkeeping  •  Coronavirus Advice  •  financial advice  •  government  •  Services  •  Small Business

How to apply the new Job Support Scheme across your workforce

By RJP LLP on 12 October, 2020

Updated 26 October 2020

The furlough scheme (Coronavirus Job Retention Scheme) will be ending on 31 October 2020 and is being replaced with the Job Support Scheme (JSS). This commences on 1 November 2020 and has already been enhanced by the government, meaning that employers are now required to contribute less, employees can work fewer hours and the government contributes more. There is also a separate scheme for businesses that have been required to close due to Covid restrictions.

This article explains how the new enhanced Job Support Scheme will operate for employers and employees.

How the new enhanced Job Support Scheme works

The original JSS (Job Support Scheme) proposed a short-time working scheme where an employee had to work and be paid for at least 33% of their normal hours. In return the government would provide a wage top up for a portion of the 67% working time remaining. This original version of the scheme has now been scrapped and replaced with two options for employers who require support from the government to pay wages.

JSS Open – this is a more generous version of the original JSS for employers whose revenues have been adversely impacted by Covid-19 and who are operating in local Covid alert tiers 1 and 2. It is designed for businesses that have seen demand drop because of Coronavirus, but who can still legally open for business.

JSS Closed – this is a government support grant for businesses in local Covid tier 3 areas who have been forced to close due to government imposed restrictions. It is more in-line with the original furlough scheme (which ceases on 31 October 2020) and it provides a payment to the employee covering part of their normal wages. JSS Closed is available regardless of whether the employee has been furloughed previously under CJRS. It is effectively a less generous form of the furlough scheme with the government providing grants to cover 67% of wages (previously 80% under CJRS), while employees take a 33% hit (instead of 20% in CJRS).

Both versions of the JSS are open to all small and medium sized enterprises and larger businesses whose turnover is impacted by COVID-19. Larger businesses are not expected to use the scheme unless they face exceptional circumstances.

Key facts about the Job Support Scheme

Employers who are not legally forced to close but who face decreased demand are able to use the "JSS Open" scheme.

The scheme runs from 01/11/20 to 30/04/21

The terms of the scheme will be reviewed in January, but for the period 01/11/20 to 31/01/21, the rules are as follows:

  • JSS Open can be claimed for employees who were on the company PAYE on or before 23/09/20 and were still in employment on 23/09/20;
  • If employees ceased employment after 23/09/20 and were subsequently rehired, then these employees can also be claimed for;
  • An employee must work a minimum of 20% of their usual hours;
  • An employer must pay the employee 100% of their usual salary for the hours worked;
  • For time not worked, the employee will receive 66.67% of their normal pay, made up as follows:
    • Employer pays: 5% up to a maximum of £125 per month (this can be topped up further based on employer discretion)
    • Government pays 61.67% up to a maximum of £1,541.75 per month.

The first claim (i.e. for November) can be claimed after 08/12/20

There is no requirement for the employer to have participated in the CJRS (furlough scheme) and employers using JSS will still be able to claim the job retention bonus.

The scheme is flexible. Employees can cycle on and off the scheme and work in different patterns.

Employers must enter into written short time working agreements with participating employees and these agreements must cover a period of at least seven days. This necessary change to employees’ contracts is effectively a temporary variation to terms and conditions (similar to a flexible furlough agreement).

Employer’s NIC and pension will not be covered by the JSS and the expectation is that employers cannot top up salaries.

Employees cannot be made redundant (or put on notice of redundancy) during any claim month.

Employers will be reimbursed on a monthly basis, after payment of the relevant employees’ salary has been reported to HMRC through the RTI system.

HMRC will notify employees directly of details of claims that include them.

In practice: How does the JSS Open actually work?

We have created a guide explaining exactly how the Job Support Scheme JSS Open operates, with examples for full time employees earning £28,000, £40,000 and £50,000 and a 3 day a week worker earning £37,500.

Here are all the details:

Worked Examples: How the government JSS Open wage top ups are applied

Person 1: Part time employee earning £37,500 per annum (3 day a week contract)

Person 1 works a 3 day week at 37,500 per annum

They would have to work 20% of their usual working hours, minimum to qualify for JSS Open. If they worked only 20% of the time, their salary would be as follows:

Annual salary £37,500.00
Percentage of time worked 20.00%
Percentage of time not worked 80.00%

Paid by Employer:
Full pay for time worked £625.00
5% of time not worked (up to cap of £125 (can be exceeded at employer discretion)) £125.00

Paid by Government:
61.67% of time not worked (up to cap of £1,541.75) £1,541.75

Person 1's new gross pay for the month £2,291.75
Total paid by employer £750.00

Person 1's usual gross pay for the month £3,125.00
Percentage of usual salary received 73.34%

Person 2: Full time employee earning £28,000 per annum

Person 2 works a 5 day week at 28,000 per annum. They would have to work 20% of their usual working hours, minimum to qualify for JSS Open. If they worked only 20% of the time, their salary would be as follows:

Annual salary £28,000.00
Percentage of time worked 20.00%
Percentage of time not worked 80.00%

Paid by Employer:
Full pay for time worked £466.67
5% of time not worked (up to cap of £125 (can be exceeded at employer discretion)) £93.33

Paid by Government:
61.67% of time not worked (up to cap of £1,541.75) £1,151.17

Person 2's gross pay for the month £1,711.17
Total paid by employer £560.00

Person 2's usual gross pay for the month £2,333.33
Percentage of usual salary received 73.34%

Person 3: Full time employee earning £40,000 per annum

Person 3 works a 5 day week at 40,000 per annum. They would have to work 20% of their usual working hours, minimum to qualify for JSS Open. The employer chooses for them to work 50% of the time.

Annual salary 40,000.00
Percentage of time worked 50.00%
Percentage of time not worked 50.00%

Paid by Employer:
Full pay for time worked £1,666.67
5% of time not worked (up to cap of £125 (can be exceeded at employer discretion)) £83.33

Paid by Government:
61.67% of time not worked (up to cap of £1,541.75) £1,027.83

Person 3's gross pay for the month £2,777.83
Total paid by employer £1,750.00

Person 3's usual gross pay for the month £3,333.33
Percentage of usual salary received £83.34%

Person 4: Full time employee earning £50,000 per annum

Person 4 works a 5 day week at 50,000 per annum. They would have to work 20% of their usual working hours, minimum to qualify for JSS Open. If they worked only 20% of the time, their salary would be as follows:

Annual salary 50,000.00
Percentage of time worked 20.00%
Percentage of time not worked 80.00%

Paid by Employer:
Full pay for time worked £833.33
5% of time not worked (up to cap of £125 (can be exceeded at employer discretion)) £125.00

Paid by Government:
61.67% of time not worked (up to cap of £1,541.75) £1,541.75

Person 4's gross pay for the month £2,500.08
Total paid by employer £958.33

Person 4's usual gross pay for the month £4,166.67
Percentage of usual salary received 60.00%

Next steps to take

Our advice to clients who are considering using this government support, is to carefully plan their resourcing needs for the coming three months and the relevant cashflow forecast to determine whether this is viable.

As we receive further information about the JSS and other support measures we will update our guidance. If you need assistance in the meantime, email partners@rjp.co.uk.

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