This article from Albert Goodman Accountants looks at how the Job Support Scheme (JSS) works and who can benefit, based on the JSS Factsheets issue up to 13 October 2020. Further guidance is expected in the coming weeks which may supersede some of the contents below.
Background
Whilst the scheme is the latest iteration of the support given to employers to preserve jobs during the Coronavirus pandemic, it is a new a separate scheme which will replace the existing Coronavirus Job Retention Scheme (CJRS) which comes to an end on 31 October 2020. The Chancellor’s intention in the design of the scheme is to support the retention of jobs through the winter of 2020/21 by subsidising the employment costs of employees working reduced hours. Within weeks of announcing the scheme it was extended further in the face of the potential lockdown of some parts of the economy.
How the scheme works
The scheme applies where an employee agrees to reduce their working time to not less than 1/3rd of their usual hours. The financial cost of the unworked hours is shared between the employee, the employer and the Government. This is most easily understood with an illustration.
Beth normally works 5 days a week on a fixed wage of £350 per week. Under the scheme she agreed to reduce her hours to 2 days a week. Her employer will pay her for the hours she actually works (2 days out of 5 = £140). The employer will also pay her for 1/3rd of the hours she does not work (1/3rd of 3 days not working = £70) with an added contribution of another 1/3rd of the non-working hours (£70) contributed by the government. Overall, Beth receives £280 of which the employer has paid £210 and the Government £70.
The late amendment to the scheme applies if the business is forced to close its premises by direction of one of the four national Governments. In that case the Government will contribute 2/3rd of normal wages, up to £2,100 per month, and there will be no requirement for the employee to do any work. The employer will have to continue to pay National Insurance and pension contributions under both version of the scheme.
Job support scheme
Qualifying conditions
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The employer must operate a UK bank account and have a UK PAYE scheme
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Large employers will be subject to a financial assessment test but SME businesses will not
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The employee must be employed and appear on an RTI payroll submission on or before 23 September 2020.
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Employees do not need to have been previously furloughed.
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The employee must work at least 1/3rd of usual hours (unless the business is in lockdown)
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The minimum short working period is 7 days but employees can cycle on and off the scheme
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The short working agreement between the employer and employee must be in writing
What are ‘usual hours’
Where an employee is on fixed hours this is a straightforward question. It becomes more difficult where employees work regular overtime, flexible hour or are on zero hours contracts. At present we only know that the rules will be similar to those used for the CJRS scheme. It is likely that employees on fixed hours will look back to their working hours perhaps in the last pay period before 23.9.2020. Employees on variable hours may be able to look back to the same period last year or some kind of annual average. Details of how this will apply should be clearer when we have the detailed guidance.
Making a claim
The scheme starts on 1 November 2020 and claims will be made monthly in arears. The employee will have had to have been actually paid and the RTI submission made before a grant can be claimed. This poses a cashflow issue for employers who will need to fund the government contribution before it can be recovered.
Claims will be made online, presumably through the same portal as is presently used for CJRS. HMRC will be checking claims and erroneous or fraudulent claims will be withheld or repayable. The reference to withholding claims maybe suggests that some of these checks could be made before claims are processed and it is conceivable that claims could be delayed as a result.
The maximum claim is £697.22 per month for any individual employee. (£2,100 per month if the lockdown scheme applies). HMRC will be communicating details of the claims to employees, presumably to limit the opportunity for fraud. The employer cannot make up the wages lost by the employee under the scheme unless the employer is in lockdown.
What next?
Whilst the scheme may offer support to hard hit businesses over the winter it is essential to plan ahead. Apart from the logistics of the staff management and working practices there are three things to keep in mind.
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Carefully consider the cash flow implications arising from the operation of the scheme and ensure you have sufficient resources to meet the wage payment whilst waiting for grants to be paid out.
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The short time working agreement needs to be in writing so you will need to consult legal/HR advisers to ensure this can be put in place.
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The scheme is designed to run for 6 months but will be reviewed after 3 months. It is conceivable that such a review could change the Government’s level of contribution or the qualifying conditions for the scheme.
This leaflet has been produced for general guidance only and professional advice should be sought before taking any particular action. If you have questions about how this applies to your circumstances speak to your normal contact at Albert Goodman or email andrew.law@albertgoodman.co.uk

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