Understanding the Support Packages from UK Government for employers

The Coronavirus Job Retention scheme is set to wind down during October with the final claims having to be submitted during the month of November.

From 1st November for 6 months there are two options for employers – the Job Support Scheme and the Extended Job Support Scheme in addition to the Job Retention Bonus.

Job Retention Bonus

The Job Retention Bonus is a £1,000 one-off taxable payment to you (the employer), for each eligible employee that you furloughed and kept continuously employed until 31 January 2021.

You’ll be able to claim the bonus between 15 February 2021 and 31 March 2021. You do not have to pay this money to your employee.

You can claim the bonus if you’re an employer who has furloughed employees and made an eligible claim for them through the Coronavirus Job Retention Scheme. Your employee must have been eligible for the Coronavirus Job Retention Scheme grant for you to be eligible for the bonus.

You can still claim the bonus if you make a claim for that employee through the job support scheme.

You cannot claim the bonus for any employees that you have not paid using the Coronavirus Job Retention Scheme grant because you have repaid all the grant amounts you claimed for them. This applies regardless of the reason why you repaid the grant amounts.

You can claim for employees that:

• you made an eligible claim for under the Coronavirus Job Retention Scheme
• you kept continuously employed from the end of the claim period of your last Coronavirus Job Retention Scheme claim for them, until 31 January 2021
• are not serving a contractual or statutory notice period for you on 31 January 2021 (this includes people serving notice of retirement)
• you paid enough an amount in each relevant tax month and enough to meet the Job Retention Bonus minimum income threshold:

To meet the minimum income threshold you must pay your employee a total of at least £1,560 (gross) throughout the tax months:

• 6 November to 5 December 2020
• 6 December 2020 to 5 January 2021
• 6 January to 5 February 2021

If HMRC are still checking your Coronavirus Job Retention Scheme claims, you can still claim the Job Retention Bonus but your payment may be delayed until those checks are completed.

HMRC will not pay the bonus if you made an incorrect Coronavirus Job Retention Scheme claim and your employee was not eligible for the Coronavirus Job Retention Scheme.

Job Support Scheme

If your business can open then the government state they want to support you to bring those people back to work through the job support scheme which will directly support the wages of people who are in work to give businesses the option of keeping employees in a job on shorter hours rather than making them redundant. This support is through the original JSS announced in September as part of the winter economy plan. Although full guidance has not yet been released we do know:

• The JSS will be introduced on 1 November 2020 to protect only viable jobs;
• Employees must work at least a 1/3 of their normal hours and be paid for those hours as normal by their employer;
• The Government and employers will increase those wages by covering 2/3 of the pay that employees have lost by the reduction in their working hours, and the employees will keep their job;
• For every hour not worked the employer and government will each pay 1/3 of the employee’s usual pay, subject to conditions;
• The table below assists with how the JSS is expected to work;
  Hours Employee Worked 33% 40% 50% 60% 70%
  Hours Employee Not Working 67% 60% 50% 40% 30%
  Employee Earnings (% of normal) 78% 80% 83% 87% 90%
  Gov’t Grant (% of normal wages) 22% 20% 17% 13% 10%
  Employer Cost (% normal wages) 55% 60% 67% 73% 80%
• The level of grant under the JSS will be calculated using an employee’s usual salary, but the government contribution will be capped at £697.92 per month;
• Employees must not have been made redundant, nor given notice of redundancy during the period within which their employer is claiming the JSS grant;
• Employer’s will be reimbursed in arrears for the government contribution;
• Anyone who has been employed since 23 September 2020 (and has been submitted on an FPS before this date) is eligible;
• All Small and Medium Enterprises (SMEs) will be eligible to apply for the JSS, that have a UK bank account and a UK PAYE scheme;
• Larger businesses can only apply to the JSS where their turnover or revenue has fallen or been adversely affected by COVID-19, there will be restrictions on the capital distributions (such as dividends) of large companies to their shareholders, whilst they are in receipt of JSS;
• The JSS will be open to employers who did not originally claim any furlough payments under the Coronavirus Job Retention Scheme and run for 6 months starting in November 2020; and Employers retaining furloughed staff on shorter hours can claim under the JSS and the Job Retention Bonus

The Extended Job Support Scheme

Rishi Sunak announced the extended Job Support Scheme (JSS) for businesses, which are required to close due to local or national restrictions, stating that the approach to protecting jobs needs to evolve as the situation evolves during the crisis. The support for businesses will be in the form of grants to help pay the wages of staff who cannot work due to local restrictions.

The extension of JSS applies to businesses in any region or nation of the UK that are legally required to shut over the winter period. That includes those businesses that are required to provide delivery and collection services only from their premises, or only serve food and drink outdoors from their premises.

The key details of the extended JSS are:

• Employees must be employed and an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 23 September;
• Employees must have been furloughed for a minimum of 7 consecutive days;
• Employees will receive 2/3rd of their normal salary (67%) up to £2,100 a month, from their employer;
• The government will cover the cost of each employees’ furloughed wages (only for businesses that are required to close);
• The employer will only need to cover the cost of employer national insurance and pension contributions;
• Employees of businesses that have been legally closed in the period before 1 November 2020 are eligible for the CJRS (furlough scheme);
• The extended JSS will open on 1 November 2020 for 6 months and a review will take place in January 2021; and Payments will be made in arrears, via a HMRC claims service, that will be available in early December 2020.

Support from Phase 3

Our Furlough Hub will be regularly updated with new calculators and guidance documents for the Job Retention Bonus, and the Job Support Schemes as soon as further guidance is available from HMRC. Our Managed Payroll Services includes the calculation and payment to employees in respect of all of the above.