The Job Support Scheme announced as part of the winter economy plan is already being changed significantly before its implementation on 1 November 2020. This document provides a summary of the most relevant and important points of the coronavirus Job Support Scheme Open (businesses that are operating but facing decreased demand). We will publish further separate information on the coronavirus Job Support Scheme Closed, which will only be available to businesses that are legally required to close.
Rishi Sunak announced, yesterday on 22 October 2020, the following changes to the scheme announced in September. This is only 8 days before the scheme is set to begin:
- The minimum working period has been reduced to 20% of usual hours, previously this was one third.
- The contribution by the government has been increased to 61.67% of hours not worked, previously this was only one third.
This means that the employer will only need to contribute 5% towards the unworked hours, as well as paying for the hours worked and any employers national insurance and pension contributions.
To access the scheme employers have to be facing reduced demand. For those employers who employ over 250 people, they must undertake a financial impact test to demonstrate their turnover has remained equal or fallen, to show they have been adversely effected. Smaller businesses are not required to satisfy this test.
Employers must have reached a written agreement with their employee’s. This temporary working agreement must cover at least 7 consecutive days. Employers must:
- Make sure any agreement is consistent with employment, equality and discrimination laws
- Keep a written record of the agreement for 5 years
- Keep records of how many hours worked and the number of usual hours that employees are not working
The agreement must be made available to HMRC on request.
Claims commence from the later of when:
- An employee starts working reduced hours, or
- The date when working reduced hours is confirmed in writing, not when the decision is made.
Therefore employers that are hoping to access these grants as soon as the CJRS ends, will need to have written agreements in place prior to 1 November 2020.
The full amount due to an employee must be paid to the employee prior to a claim being made. Employees will be able to check their personal tax accounts to see if their employer has made a Job Support Scheme claim for them.
We now have a definition for usual hours.
For employees who work fixed hours, usual hours will be the greater of:
- The hours the employee was contracted for at the end of the last full pay period ending on or before 23 September 2020
- The hours the employee was contracted for at the end of the last full pay period ending on or before 19 March 2020 (this may be the same as those calculated under the CJRS)
For employees who work variable hours, it will be the greater of:
- The number of hours worked in the same calendar period in the tax year 2019/20
- The average number of hours worked in 2019/20
- The average number of hours worked from 1 February 2020 (or start date if later) until 23 September 2020
Both of the above include hours paid as annual leave and statutory leave.
The government have published indicative calculations, however they have said that full details will not be available until the end of the month. Further details on the scheme are now available at https://www.gov.uk/government/publications/the-job-support-scheme/the-job-support-scheme. To see these examples please see section 5.
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