In recognition of the challenging times ahead, the Chancellor said he would be increasing support through the existing Job Support and self-employed schemes, and expanding business grants to support companies in high-alert level areas.
Job Support Scheme (JSS) – updated
The original furlough scheme ends 31 October and a new one starts, which will run for 6 months.
When originally announced, the JSS – which will come into effect on 1 November – saw employers paying a third of their employees’ wages for hours not worked, and required employees to be working 33% of their normal hours.
The latest announcement reduces the employer contribution to those unworked hours to just 5%, and reduces the minimum hours requirements to 20%, so those working just one day a week will be eligible.
There are two schemes one for businesses that are open but affected by Covid and those that are closed due to Covid.
Employers facing decreased demand (JSS Open)
Employee works minimum hours of 20% of their usual working week.
For every hour not worked, the employee will be paid up to two-thirds of their usual salary.
The government will provide up to 61.67% of wages for hours not worked, up to £1541.75 per month.
So, as a minimum, the employee works 20% of their usual working week, which the employer pays for as usual
Plus, the employee gets two-thirds of the remaining unworked pay
Of the two thirds, the employer pays 5% (up to a maximum of £125 pm) and the government pays 61.67% (up to a maximum of £1541.75 pm)
So total percentage paid by employer 25%
Total percentage of pay employee receives is 73.33% (if they only work the minimum 20%)
Employers who are legally required to close their premises (JSS Closed)
This is for businesses which have been legally required to close their premises as a direct result of coronavirus restrictions set by one or more of the four governments of the UK.
Each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month, although their employer has discretion to pay more than this if they wish .
NOTE: The Job Support Scheme grant will not cover National Insurance contributions (NICs) or pension contributions. These contributions remain payable by the employer.
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. This is worth £1,000 per employee if they are retained until February.
Furlough grant monies must only reimburse sums already paid to the employee
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.
HMRC will check claims and payments may be withheld if HMRC suspects a claim to be ineligible.
The amount of any overpayment by the employer must be paid back to HMRC where a claim contains incorrect information.
The full amount of any grant must be repaid if a claim is found to be fraudulent. Penalties of up to 100% of the amount overclaimed may be applied where appropriate. HMRC will consider publishing the details of employers who are charged a penalty because of a deliberately incorrect Job Support Scheme grant claim.
HMRC intend to publish the names of employers who have used the scheme. The public can report fraud to HMRC if they have evidence to suggest an employer is abusing the scheme.
Employees will be able to check if their employer has made a claim relating to them via their Personal Tax Account (sign up on GOV.UK).
Self-employed grant continuing & increased
It has now been announced that the amount of profits covered by the two forthcoming self-employed grants will increase from 20 per cent to 40 per cent, meaning the maximum grant will increase from £1,875 to £3,750.
- The government will provide two further taxable SEISS grants to support those experiencing reduced demand due to COVID-19 but are continuing to trade, or temporarily cannot trade.
- It will be available to anyone who was previously eligible for the SEISS grant one and grant two, and meets the eligibility criteria.
- Grants will be paid in two lump sum instalments each covering 3 months. The first grant will cover a three-month period from the start of November 2020 until the end of January 2021. The government will pay a taxable grant which is calculated based on 40% of three months’ average trading profits, paid out in a single instalment and capped at £3,750.
- The second grant will cover a three-month period from the start of February until the end of April 2021. The government will review the level of the second grant and set this in due course.
The Chancellor has also announced approved additional funding to support cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert level areas. These grants will be available retrospectively for areas who have already been subject to restrictions.
This is to support businesses in high-alert level areas which are not legally closed, but which are severely impacted by the restrictions on socialising. The funding will be provided to Local Authorities an what they will receive will be based on the number of hospitality, hotel, B&B, and leisure businesses in their area.
It will be up to Local Authorities to determine which businesses are eligible for grant funding in their local areas, and what precise funding to allocate to each business – the following levels are an approximate guide.
- For properties with a rateable value of £15,000 or under, grants of £934 per month.
- For properties with a rateable value over £15,000 and below £51,000, grants of £1,400 per month.
- For properties with a rateable value of exactly £51,000 and over, grants of £2,100 per month.