The Chancellor has been under pressure since his Winter Economy Plan announcement back in late September to go further in providing financial help for businesses. As a result of the ever-changing Covid-19 situation, Rishi Sunak has proposed the following changes to the Job Support Scheme. From the 1st of November 2020, the following scenarios will come into effect...
The UK government will top up wages for those employees working shorter hours than their ‘normal hours’ for businesses facing lower demand due to COVID-19.
- Employees must work at least 20% of their usual hours.
- For every hour not worked the Government will cover 61.7%% of employee’s usual pay (capped at £1541.75 pm)
- For every hour not worked the employer must cover at least 5% of employee’s usual pay.
The UK Government will also provide financial support for those employees who cannot work as a result of their employer being forced to close under Covid-19 regulations. This will be through the employer’s PAYE scheme.
- The government will pay two-thirds of each employee’s salary up to a monthly maximum of £2,100.
- No employer salary top-up will be required.
- Businesses must be required legally to close as part of local or national restrictions and employees must be off work for a minimum of 7 consecutive days.
- This includes businesses that are required to provide only delivery and collection services from their premises or food and drink outdoors from their premises.
For both Scenario A and B the following criteria will apply:
- The employee must not be on a redundancy notice.
- Employers will be reimbursed in arrears.
- The employer must have a UK PAYE scheme and a UK bank account.
- All small and medium enterprises will be eligible.
- The employee must have been on the employer RTI submission made to HMRC on or before 23rd September 2020.
- Employers must agree on the new scheme with staff in writing, including any changes to the employment contract. This agreement must be made available to HMRC on request.
- Larger businesses can claim if they can demonstrate that they have been adversely affected by COVID-19. The government expects large employers not to make distributions while using the scheme.
- Employers can still claim the Job Retention Scheme bonus in 2021, even if claiming under the Job Support Scheme.
- The employer will be required to cover the cost of the employees' NIC and pension contributions.
- The claims are to be made in arrears through an HMRC Claims portal to be available from early December 2020.
For more information visit www.gov.uk/coronavirus/business-support