On the 24th September, Chancellor Rishi Sunak MP outlined additional Government COVID Business Support Measures.
These aim to provide certainty for businesses and workers impacted by Coronavirus across the UK. This is especially important now, in the run up to the winter period.
Keep reading for the:
- Key measures announced
- Our HR advice on how to interpret and or implement them in your business
Job Support Scheme (JSS)
A new Job Support Scheme will be introduced on the 1st November and run for 6 months.
This will protect viable jobs in businesses facing lower demand over the winter months due to COVID-19. Under the scheme, the government will contribute towards the wages of employees. These employees are, as a result of the reduction in demand, working fewer than normal hours.
Employers will continue to pay the wages of staff for the hours they work. However, for the hours not worked, the government and the employer will each pay one third of their equivalent salary.
In order to support only viable jobs, employees must be working at least 33% of their usual hours. The level of the JSS grant will be calculated based on employee’s usual salary, capped at £697.92 per month.
The JSS will be open to businesses across the UK even if they have not previously used the furlough scheme. Further guidance will be published in due course.
JSS Grant payments will be made in arrears, reimbursing the employer for the Government’s contribution. The grant will not cover Class 1 employer NICs or pension contributions. These contributions will remain payable by the employer.
Claims can be made online from December 2020 and reimbursement will be made monthly.
What is a ‘viable job’ under the JSS?
The Government has further clarified this term as “capable of working successfully; feasible”.
So, in the current climate, a viable job is one which is not currently at risk of redundancy. It cannot therefore be used to support anyone who has been handed a redundancy notice.
What do you need to do to take advantage of the JSS?
- Large businesses will have to meet a financial assessment test. The scheme is only available to those whose turnover is lower now than before experiencing difficulties from Covid-19. There will be no financial assessment test for small and medium enterprises (SMEs)
- Employees must be on an employer’s PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020.
- Like the previous Furlough scheme, reduction of an employee’s hours must be mutually agreed with your employees in advance of any reduction. We would advise that any agreement is formally documented. Clearly set out how long the agreement will be in place for. Some employers may only need a one-month reduction whilst others may opt for the full six months. If you have previously sought the employee’s agreement to support the Furlough Scheme, don’t rely on this agreement as consent for the new JSS.
- Once an employee is in the JSS, employees can cycle on and off the scheme. There is no requirement for the employee, once in the JSS, to work the same number of hours each month. This is providing any changes do not fall below the minimum working hours requirement. However, each reduced hours working arrangement must last for at least seven days.
- Any agreements made must be made available to HMRC on request. Payments may be withheld or need to be paid back if a claim is found to be fraudulent or based on incorrect information. Grants can only be used as reimbursement for wage costs actually incurred.
- Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the JSS grant for that employee.
Self-employment income support scheme
The Government is continuing its support for millions of self-employed by extending the Self Employment Income Support Scheme Grant (SEISS).
An initial taxable grant will be provided to those who:
- Are currently eligible for SEISS
- AND are continuing to actively trade but face reduced demand due to coronavirus.
The initial lump sum will cover three months’ worth of profits. This will be for the period from November to the end of January next year. This is worth 20% of average monthly profits, up to a total of £1,875.
An additional second grant will be available for the self-employed. This will cover the period from February 2021 to the end of April. This may be adjusted to respond to changing circumstances.
Tax cuts and deferrals
Business who deferred their VAT bills will be given more breathing space through the New Payment Scheme. This gives them the option to pay back in smaller instalments.
Self-assessment taxpayers will be able to benefit from a separate additional 12-month extension from HMRC on the “Time to Pay” self-service facility. Payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.
Giving businesses flexibility to pay back loans
Businesses who took out a Bounce Back Loan will be given the option to repay their loan over a period of up to ten years through a new Pay as You Grow flexible repayment system. Interest-only periods of up to six months and payment holidays will also be available to businesses.
Coronavirus Business Interruption Loan Scheme lenders will be able to extend the length of loans. This will be from a maximum of six years to ten years if it will help businesses to repay the loan.
The government is extending four temporary loan schemes to 30 November 2020 for new application. As a result, more businesses will now be able to benefit from the:
- Coronavirus Business Interruption Loan Scheme
- Coronavirus Large Business Interruption Loan Scheme
- Bounce Back Loan Scheme
- Future Fund
HR Support and COVID Business Support Measures
Would like more guidance regarding these COVID Business Support Measures? Get in touch with us! Email firstname.lastname@example.org or call us on 0203 667 7270
Note: The information provided in this briefing was correct at time of publication. However, this guidance must be viewed and interpreted within the context of your own business and based on any changes – clarification that is subsequently issued by HMRC and/or HM Government.