Extension to the Job Support Scheme
On 24 September 2020, the Chancellor announced the Job Support Scheme (“JSS”), as explained here. In its original form, the JSS would not provide support to businesses that are legally required to close their premises due to Covid-19 restrictions, meaning that employees are unable to work. Therefore, on 9 October, the Chancellor announced an extension to the scheme.
The extension will also apply from 1 November and will help businesses that are legally required to close their premises as a direct result of local or national Covid-19 restrictions, including those businesses that are required to provide only delivery and collection services. The extension will not apply to businesses that are required by local public health authorities to close following a specific workplace Covid-19 outbreak.
Currently, there is no exclusion for large employers based on a financial assessment test (as applies under the original JSS), but there is an expectation that large employers will not claim if they are doing well enough to make capital distributions.
For the extended JSS to apply to an employee, they must be off work for a minimum of seven consecutive days following an instruction from their employer to cease work as a result of restrictions applicable to the employer's premises. In addition, a Real Time Information (“RTI”) submission notifying payment to that employee to HMRC must have been made on or before 23 September.
The government will fund two thirds of eligible employees' normal pay, up to £2,100 per month, with payments to employers being made in arrears and subject to tax. The payments will only be made in respect of periods that an employee has ceased work altogether. The only contribution required from employers under the scheme will be to cover employer national insurance contributions and auto enrolment pension contributions, but employers may make additional the payments if they wish – and, indeed, they should bear in mind that as was the case under the Coronavirus Job Retention Scheme (“CJRS”), unless they have the benefit of a contractual lay-off provision which entitles them to do so, they will need the agreement of the employee, or otherwise appropriately effect an amendment to their employment terms, if they are to lawfully make reduced payments.
An employer does not need to have made claims under the CJRS to make a claim under the extended JSS.
When its premises re-open, an employer can claim under the original JSS if it meets the criteria applicable to that part of the scheme.
As applies in the case of the original JSS, an employee cannot be made redundant or put on notice of redundancy during the period in respect of which their employer is making a claim.
HMRC intends to publish the names of employers that have used the JSS, so that employees will be able to find out if their employer has claimed for them. This has not been a feature of the CJRS.
The extension will sit alongside the original JSS and the Job Retention Bonus scheme. The online claims service is expected to be available from early December 2020.
HM Treasury has published a factsheet with some of the details as to how the extended scheme will work. However, clarification and guidance from HMRC is needed on both parts of the scheme, with detailed HMRC guidance and a Treasury direction yet to be published. For example, it remains to be seen how the two parts of the JSS will work together for employers that re-open and exactly what rules will apply to large employers in respect of the different parts of the scheme.
This leaves employers with little time to put appropriate arrangements in place by 1 November. However, we are assisting employers with arrangements based on the information currently available, to include reserving their position in respect of any developments in the way the JRS is to operate.