Measures announced on 21 October 2020

NEW MEASURES IN SUPPORT OF BUSINESSES

The UK government announced on 21 October 2020 that it will significantly increase the generosity and reach of its winter support schemes to ensure livelihoods and jobs across the UK continue to be protected in the difficult months to come, supporting jobs and helping to contain the virus. Here are the main measures:

Job Support Scheme

The Job Support Scheme (JSS) will open on 1‌‌‌ ‌November and run for six months, until 30‌‌‌ ‌April 2021. The government has said it will review the terms of the scheme in January 2021. There are two variations to JSS as follows:

• JSS Open

• JSS Closed

JSS Open

JSS Open will provide support to businesses that are open where employees are working shorter hours due to reduced demand. Employees will need to work at least 20% of their usual hours (Rather 33% as previously announced). Employers will continue to pay employees for the hours they work, and the UK government will pay a contribution of 61.67% of the usual pay for hours not worked, up to a maximum of £1,541.75 per month. Employers will pay 5% of the usual pay for hours not worked, up to a maximum of £125 per month, and can top this up further if they choose. This means employees should receive at least two thirds of their usual pay for hours not worked.

The caps are reduced according to the proportion of hours not worked. Further guidance on this will be available on GOV‌‌‌‌.UK shortly.

Employers will need to cover all employer National Insurance and pension contributions.

JSS Closed

JSS Closed will provide support to businesses whose premises are legally required to close as a direct result of coronavirus restrictions set by one of the four governments of the UK. This includes premises restricted to delivery or collection-only services from their premises, and those restricted to providing food and/or drinks outdoors.

For JSS Closed, the UK government will fund two thirds of employees’ usual wages for time not worked, up to a maximum of £2,083.33 per month. Employers will not be required to contribute, but they can top up the government’s contribution if they choose to. Employers will still need to cover all employer National Insurance and pension contributions.

The first JSS claim can be made in arrears from 8‌‌‌ ‌December, for pay periods ending and paid in November. 

Self-Employment Income Support Scheme (SEISS) Grant Extension

As part of support for businesses through the coronavirus pandemic, the UK government has increased the support available under the SEISS Grant Extension doubling the value of the first grant.

This brings support for the self-employed in line with that for employers under the Job Support Scheme Open.

The value of the first SEISS Grant Extension, covering the period November 2020 to the end of January 2021, will double. This means that the UK government will provide an initial SEISS grant based on 40% of three months’ average trading profits, paid out in a single instalment, and capped at £3,750 in total.

To ensure that support will be targeted to those who most need it, SEISS Grant Extension will be available to self-employed individuals who temporarily cannot trade as well as those continuing to trade and facing reduced demand due to COVID-19.

HMRC will provide full details about claiming and applications in guidance on GOV‌‌‌‌.UK in mid-November.

Job Retention Bonus (JRB)

A one-off payment of £1,000 for every eligible employee furloughed by the employer can be claimed through the Coronavirus Job Retention Scheme (CJRS), as long as the employee has been kept continuously employed until at least 31‌‌‌ ‌January 2021 and he.she meets the other eligibility criteria. Employers do not have to pay this money to their employee.

The bonus can be claimed between 15‌‌‌ ‌February and 31‌‌‌ ‌March. To do this PAYE information for the period up to 5‌‌‌ ‌February 2021 must be submitted on time.

Coronavirus Job Retention Scheme – closes on 31‌‌‌ ‌October

This scheme closes on 31‌‌‌ ‌October and employers will need to make any final claims on or before 30‌‌‌ ‌November. Employers will not be able to submit or add to any claims after 30‌‌‌ ‌November.

From 1‌‌‌ ‌October, the UK government has paid employers 60% of usual wages up to a cap of £1,875 per month for the hours furloughed employees do not work.

Employers must have continued to pay furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. Employers need to fund the difference between this and the CJRS grant themselves.

The caps are proportional to the hours not worked. For example, if an employee is furloughed for half their usual hours in October, employers are entitled to claim 60% of their usual wages for the hours they do not work, up to £937.50 (half of £1,875 cap). Employers must still pay their employee at least 80% of their usual wages for the hours they don’t work, so for someone only working half their usual hours they’d need to pay them up to £1,250 (half of £2,500 cap), funding the remaining portion themselves. 

For help on how to calculate the correct salary payable and the CJRS grant please write to info@bestchoiceaccountancy.co.uk or call 020 8857 5781 

Employers will also continue to pay employer National Insurance and pension contributions from their own funds.

Employers must keep the records that support the amount of CJRS grant they have claimed in case HMRC needs to check it. Employers can now view, print or download copies of their previously submitted claims by logging onto their CJRS service on GOV‌‌‌‌.UK.

Claimed too much in error?

It’s important that employers check each claim is accurate before submitting it, and we would also recommend checking previous claims and repaying any amount over-claimed so you will not have to pay interest and penalties if HMRC subsequently discovers you have claimed too much.

If you have claimed too much CJRS grant and have not already repaid it, you must notify HMRC and repay the money by the latest of whichever date applies below:

• 90 days from receiving the CJRS money you’re not entitled to

• 90 days from the point circumstances changed so that you were no longer entitled to keep the CJRS grant.

You may have to pay interest and a penalty as well as for any delay in repaying the excess CJRS grant.