The Coronavirus Job Retention Scheme (‘furloughing’) will be replaced with a new ‘Job Support Scheme’ (which was due to launch on 1st November, but has been delayed). It will run for six months and will be available to all businesses including those that haven’t used the Job Retention Scheme.
There are two variants of the scheme – JSS open (if you are not legally required to close) and JSS closed (if you are legally required to close by the government). For consultants, contractors and service business owners it is likely that the ‘JSS open’ scheme will apply.
The JSS Open scheme is designed to support businesses where employees can still work but at a reduced level. You, or your employees will need to work at least 20% of their usual hours paid for by the employer as normal.
For unworked hours, the government will contribute 61.67% of the usual pay subject to a monthly cap of £1,541.75. The employer (your company) will need to pay 5% of the usual pay for unworked hours and this means the employee will receive at least two thirds of their usual pay for unworked hours. Employers can also top up the salary to the normal level if they wish. Employers will need to pay all employer national insurance and pension contributions.
Employees will be able to enter and leave the scheme and have different short term working agreements however each agreement should cover at least seven consecutive days.
The government are still due to release further guidance on how to calculate any claims.
Making a claim
Claims will be made in arrears from 8th December 2020 with payments being made by HMRC after they’ve approved the claim.
You can only claim for employees that were in employment on 23rd September 2020. A real time information (RTI) full payment submission to HMRC must have been made on or before this date – this means, for inniAccounts clients, that you need to have issued a payslip on or before this date.
If you’re a client, inniAccounts will be able to assist you with making the claims.
Employers must have written agreement with the employee that they have been offered a temporary working agreement with any changes to the employment contract being made as required. The agreement must be available for view by HMRC on request.
There are still unanswered questions and HMRC are expecting to publish further guidance shortly on things like how to calculate the claims, further eligibility requirements and what to include in the written agreement.
Job Support Scheme: FAQs
Do I need to have used the Job Retention Scheme to qualify?
No, all small and medium businesses will be able to use the scheme regardless of whether the Job Retention Scheme was used previously.
If I use this scheme, will I still be able to claim the Job Retention Bonus for eligible employees?
Yes, the government has confirmed this and provided the eligibility criteria is met the bonus can still be claimed for employees that used the Job Retention Scheme.
I’ve been on furlough to 31st October as I’m out of contract because of CV-19, can I use this new scheme?
To use the new scheme you will need to be working at least 20% of your normal working hours.
What we don’t know at this stage is whether doing other, non-contracting work such as things like searching for new contracts, business development and administrative duties would contribute towards the 20%. As soon as HMRC release further details we will provide an update here.
Is there anything I can claim from the government regarding my dividends?
No, the Job Support Scheme only covers pay that has gone through payroll.