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5th November 2020

Job Retention Scheme & Self Employed Income Support Grant

Filed Under: Coronavirus / COVID-19 updates, Tax

In light of increased restrictions due to the coronavirus pandemic, the government is introducing additional measures to support employers, employees, and self-employed.

Coronavirus Job Retention Scheme (CJRS)

The Job Support Scheme has been placed on hold, reinstating the Job Retention Scheme until March 2021*. From 1st November the government will pay 80% of wages for the hours furloughed employees do not work, up to a cap of £2,500. Similar to the rules in August, employers will need to pay all employer national insurance contributions (NICs) and employer pension contributions.

Claims can be made for employees who were included in a PAYE Real Time Information (RTI) submission between 20 March 2020 to 30 October 2020 (23:59). Employees who have been made redundant or stopped working for the company can qualify for the scheme if rehired and included on an RTI submission on or before 23 September 2020.

*The government will review the policy in January 2021 and is subject to change.

Self-Employment Income Support Scheme (SEISS) Grant Extension 

In September the Government announced two further grants under the Self-Employment Income Support Scheme (SEISS) with the extension lasting 6 months to April 2021.

The third grant covering the periods November 2020 – January 2021, will provide a taxable payment calculated at 80% of 3 months average trading profits, capped at £7,500. This is an increase from the previously announced 55%.  The fourth grant covering periods February 2021 – April 2021 will be announced in due course by the government.

To be eligible to claim for the SEISS grant extension, self-employed individuals including members of partnerships must have:

  • Been previously eligible for the SEISS first and second grant
  • intended to continue to trade but are impacted by reduced demand due to coronavirus
  • previously traded but are temporarily unable to do so due to coronavirus

For further information or assistance please contact our office on 01903 300230.

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27th October 2020

Update to the Job Support Scheme (JSS)

Filed Under: Coronavirus / COVID-19 updates

The Chancellor has announced changes to the Job Support Scheme after calls for more support for businesses and employees in the UK.

There will now be two versions of the scheme – JSS Open and JSS Closed.

JSS Open

The JSS Open scheme will provide support to businesses that are open, but employees are working shorter hours due to reduced demand for services. The criteria for making use of the scheme is the same as the original JSS, but amounts have been adjusted to better support businesses.

  • Employees must work at least 20% of their usual hours (reduced from 33.33%)
  • For time not worked, employees will receive JSS payment of 66.67% of their usual salary
  • The JSS payment is made up of 61.67% from the government (up from 33.33%) and 5% from the employer (down from 33.33%)

The scheme is available to all businesses in the UK, so long as they have a UK bank account and UK PAYE scheme

JSS Closed

The JSS Closed scheme supports businesses that have been legally required to close their premises, as a result of local lockdown restrictions. This includes premises restricted to delivery or collection-only services and those restricted to providing food or drink outdoors.

Under this scheme, the government will fund 2/3rds of employee’s usual wages for time not worked (up to a maximum of £2,083.33 per month), in a similar fashion to the Furlough scheme.

Employers will not be required to contribute, but are able to top up the government’s payment if so desired. National Insurance and pension contributions are still required by the employer.

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7th October 2020

Job Support Scheme (JSS)

Filed Under: Coronavirus / COVID-19 updates

The chancellor has recently announced a replacement to the furlough scheme which finishes at the end of October. The new scheme will run from 1 November to April 2021 and is called the Job Support Scheme (JSS). The aim of the scheme is to protect viable jobs where the employer is facing lower demand due to the Coronavirus pandemic.

Basic Criteria 

  • The employee will work reduced hours, but at a least one third of their normal hours
  • Employers must have a UK bank account and UK PAYE scheme
  • Neither the employer or employee need to have used the Job Retention Scheme
  • Employees must have been on the payroll submission to HMRC by 23 September 2020
  • Employees must, for the first 3 months, work at least 33% of their usual hours
  • Employees can come on and off the scheme, but each short time working arrangement must be for at least 7 days
  • Employees cannot be made redundant or put on notice of redundancy whilst on the scheme
  • The government’s contribution is capped at £697.92 per month

As the employer, you are paying your employee for the hours they have worked plus one third of the hours they have not worked*. In addition, you will have to pay National Insurance and pension contributions (if applicable) based on the employee’s gross pay through the JSS.

You can claim back the JSS funding via your government gateway. If you wish for us to make the claim on your behalf, please let us know so that we can advise you of our fees for this service.

How the scheme works in practice

Pre Covid-19 an employee worked full time for 35 hours per week, receiving £2,000 gross per month for this work. Using the JSS the employee has agreed with his employer to work 50% of his normal hours (17.5) for the month of November.

Employee receives 

  • Pay for hours worked £1,000 (£2,000 x 50% / 2.5 days per week)
  • JSS of £666.67 which is 2/3rds of the time not worked (£1,000 x 66.6%)
  • TOTAL due to the employee £1,666.67

Employer costs

  • Pay for hours worked of £1,000 (£2,000 x 50% / 2.5 days per week)
  • JSS of £333.33* which is 1/3rd of the time not worked (£1,000 x 33.3%)
  • Employer NI of £128.98 on pay for hours worked plus 2/3rds of time not worked (based on A rate NI)
  • Employer pension of £34.40 on pay for hours worked plus 2/3rds of time not worked (based on 3% of qualifying earnings)
  • TOTAL cost to the employer £1,496.71

*Initially you will have to pay two thirds to your employee and then get one third back from the government after payment has been made to the employee.

HMRC Checks

HMRC will check claims. Payment may be withheld or need to be paid back if a claim is found to be fraudulent. Employers must agree the new short time working arrangements with their staff, making any changes to their employment contract and notify the employee in writing. This agreement must be available to HMRC on request.

Job Retention Bonus

Employers wishing to make use of the Job Support Scheme will still be eligible for the £1,000 Job Retention Bonus, assuming the other necessary conditions are met.

For more information about the JSS or Job Retention Bonus, please contact                    Katie Herbert katie.herbert@thlaccountancy.co.uk or                                            Debbie Sewell debbie.sewell@thlaccountancy.co.uk

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