Support increased: Job Support Scheme, SEISS and business grants
Job Support Scheme (“JSS”)
For employers who can operate safely but continue to face reduced demand, the Job Support Scheme, through JSS Open, will provide support to help these employers keep employees on the workforce on shorter hours rather than making them redundant.
When the Government first announced the JSS, employers were to pay a third of their employees’ wages for hours not worked, and required employers to be working at least 33% of their normal hours.
The employer contribution has been reduced from 33% to 5%, and reduces the minimum hours of work required from 33% to 20%.
The Government will now pay up to 61.67% of wages for hours not worked, up to a maximum of £1,541.75 per month.
Employers will pay 5% of non-worked hours (capped at £125 per month) and will pay the Employer NICs and automatic enrolment pension contributions in full.
This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.
For example – Emma normally works part-time and earns £1,100 a month.
Her company puts her on the Job Support Scheme, working 20% of her usual hours, and she gets paid £220 a month for these hours.
For the time she is not working (80%), she will get 66.67% of her pay for that time – the Government will pay a grant worth £543 (61.67% of hours not worked) and the employer will pay a further £44 for hours not worked (5% of wages). This means her total wage package is 73%, equal to £807.
The employer will cover the Employer NICs and auto enrolment pension contribution on the pay.
Employers must pay employees their contracted wages for hours worked, and the Government and employer contributions for hours not worked.
As before, employers using the scheme will also be able to claim the Job Retention Bonus (“JRB”) for each employee that meets the eligibility criteria of the JRB.
Grant payments will be made in arrears, and claims can be made online from 8 December 2020.
Further guidance regarding the calculations will be provided by the government at a later date.
Employers who have been legally required to close their premises as a direct result of the restrictions set by the UK Government ae eligible to claim under this scheme.
Employees who cannot wok due to the restrictions will receive two thirds of their normal pay, and this will be fully funded by the Government, up to a maximum of £2,083.33 per month. The employer can choose to pay more than this if they wish.
Employees must have ceased work for a minimum period of at least 7 consecutive calendar days, in order for the employer to claim under the scheme.
Employers are eligible to claim for periods only when the restrictions are in place. They cannot claim on the Closed scheme after the restrictions have lifted and businesses are legally allowed to reopen.
This includes premises restricted to delivery or collection only services from their premises and those restricted to the provision of food and/or dink outdoors.
Please note, business premises required to close by local public health authorities as a result of specific workplace outbreaks are not eligible for this scheme.
An employer can claim the JSS Open and JSS Closed grant at the same time for different employees, but not for a single employee under both schemes at the same time.
All employers claiming must have enrolled for PAYE online and have a UK, Channel Island or Isle of Man bank account.
Eligible employers will be able to claim the Job Support Scheme grant for employees who were on their PAYE payroll between 6 April 2019 and 11:59pm on 23 September 2020. Employers can only claim for employees that were in their employment on 23 September 2020. If employees ceased employment after 23 September 2020 and were subsequently rehired, then employers can claim for them.
Employees do not need to have been furloughed under the Coronavirus Job Retention Scheme to be eligible for the Job Support Scheme.
To be eligible for the grant, employers must have reached written agreement with their employee (or reached written collective agreement with a trade union where the relevant terms are determined by collective agreement) that they have been offered a temporary working agreement which must cover at least 7 consecutive days. The agreement must be available for view by HMRC on request. HMRC will publish further guidance on what to include in the written agreement by the end of October.
We have prepared template letters which can be issued to employees to confirm the employer’s use of the JSS and the amendment to their employment terms and conditions. Please get in touch with your Barnes Roffe contact if you would like to know more.
Large employers, those with more than 250 employees on 23 September 2020, must carry out a Financial Impact Test (FIT) demonstrating their turnover has remained equal or fallen to show they have been adversely affected due to coronavirus. Some, or all, of their employees must be working reduced hours. The FIT is based on VAT returns submitted; further guidance for large employers who are not VAT registered will be available by the end of October. See the GOV.UK website for further details on carrying out a FIT.
There are further conditions applying to all employers claiming JSS Open or JSS Closed:
- Employers cannot claim for an employee who has been made redundant or is serving a contractual or statutory notice period during the claim period.
- While it will not be a contractual or legal condition of the scheme, the Government expects that large employers (250 or more employees) and their corporate groups will not make capital distributions (including dividends or equivalent payments that partnerships may make to the partners) whilst claiming the Job Support Scheme grant.
- Employers must deduct and pay to HMRC income tax and employee NICs on the full amount that is paid to the employee, including any amounts subsequently met by a scheme grant. Employers must also pay the employer NIC and auto-enrolment pension scheme contributions.
- Employers must have paid the full amount claimed for an employee’s wages to the employee before each claim is made. They should also pay the associated employee tax and employee and employer National Insurance contributions to HMRC, even if the company is in administration.
Self-Employment Income Support Scheme (“SEISS”) grant extension
The government will provide two taxable SEISS grants to support individuals who have stopped trading or have had a significant fall in trade.
These grants will be available to anyone who meets the eligibility criteria, and was previously eligible for the first and second grants.
The first grant will cover a three-month period from 1 November – 31 January 2021. This has been doubled from 20% to 40% of three months’ average trading profits, meaning that qualifying self-employed individuals can claim up to £3,750. The grant will be paid out in a single instalment.
The second grant will cover a three-month period from 1 February – 30 April 2021. The government will review the level of the second grant at a later date.
HMRC will provide full details about claiming and applications in guidance on GOV.UK in due course.
Local restrictions support grant (“LRSG”)
Cash grants of up to £2,100 per month will be available for businesses in the hospitality, accommodation and leisure sector who have been adversely impacted by the restrictions in high-alert level areas. The grants will be available retrospectively for businesses in areas which have already been subject to restrictions.
The grants will be provided by Local Authorities (LAs). LAs will receive a funding amount that will be the equivalent of:
- For properties with a rateable value of £15,000 or under, grants of £934 per month.
- For properties with a rateable value of over £15,000 and below £51,000, grants of £1,400 per month.
- For properties with a rateable value of £51,000 and over, grants of £2,100 per month.
LAs will also receive a 5% top up amount to these implied grant amounts to cover other businesses that might be affected by the local restrictions, but which do not neatly fit into these categories.
It will be up to LAs to determine which businesses are eligible for grant funding in their local areas, and what precise funding to allocate to each business – the above levels are an approximate guide.
Businesses in Very High alert level areas will qualify for greater support whether closed (up to £3,000/month) or open. In the latter case support is being provided through business support packages provided to LAs as they move into the alert level.
For more information on the Business Grants available, visit the GOV.UK website.
If you require any assistance or advice in respect of any of these support measures and how they can help your business, please get in touch with your Barnes Roffe contact.Talk to Barnes Roffe today