The new Job Support Scheme will be introduced on 1 November 2020 as part of the government drive to help protect jobs where businesses are facing lower demand over the winter months due to coronavirus.
The government and employer will then each cover one-third of any remaining hours the employee is not working. Employees will therefore forego one-third of their pay for the hours that they have not been working. The maximum amount of the government contribution to the scheme will be capped at £697.92 per employee per month.
Employers should be aware of the following:
- The scheme will be open to all small and medium-sized businesses. Larger businesses will have to meet a financial assessment test in order to use the scheme. They will need to demonstrate that their turnover has fallen as a result of the pandemic. Further guidance on the financial assessment test has yet to be published.
- All employers with a UK bank account and UK PAYE schemes will be able to claim the government grant. The grant will be paid in arrears, reimbursing the employer for the government’s contribution. The claim portal will be launched from December 2020 and claims will be paid on a monthly basis.
- The grant will not cover Class 1 employer NICs or pension contributions. These payments will need to be made by the employer.
- Employers and employees can still use this scheme even if they have not used the Coronavirus Job Retention Scheme (CJRS).
- Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.
- HMRC’s expectation is that large employers using the Job Support Scheme will not be making capital distributions, such as dividend payments or share buybacks, whilst accessing the grant.
- Employers must agree the new short-time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request.
To be eligible, employees must meet the following conditions:
- Be registered on their employers PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment in respect of that employee must have been made to HMRC on or before 23 September 2020.
- For the first three months of the scheme, from 1 November 2020 – 31 January 2021, the employee must work at least 33% of their usual hours. After the first 3 months of the scheme, the government will consider whether to increase this minimum hour’s threshold.
- Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of seven days. Any changes to the employment contract must be made by agreement and notified in writing.
This scheme has been designed to support viable jobs and employees must work at least one-third of their hours, paid as normal, in order to qualify for the scheme.
If you require assistance with Payroll, please call MJB Avanti (08000) 388 799 to see how we can help by streamlining this process for you ensuring compliance and accuracy first time, every time.
Reproduced From Informanagement