COVID-19 Updates in the UK: Job Support Scheme Amendments and Furlough Fraud

Morgan Lewis

Morgan LewisThe United Kingdom has amended its new job protection scheme to require employees to work 20% of their usual hours in order to receive a government subsidy, and employers that knowingly received money to which they weren’t entitled under the previous job scheme will be subject to penalties.


In a recent LawFlash, we outlined the details of the new six-month Job Support Scheme (JSS) that is due to replace the Coronavirus Job Retention Scheme (CJRS) in the United Kingdom (UK) from 1 November 2020. The JSS marks a shift in UK government policy, from paying up to 80% of wages of those who were unable to work due to the health and economic effects of the coronavirus (COVID-19) pandemic to employees only receiving a government subsidy if they work at least a portion of their usual hours.

The details of the JSS have recently been revised by Chancellor Rishi Sunak. Under the chancellor’s original JSS announcement, an employee had to work at least one-third of their usual hours in order to benefit from the JSS. It was intended that the government would then provide one-third of an employee’s wages on top of the one-third paid by the employer. However, on 22 October 2020, Chancellor Sunak made the following amendments to the JSS:

  • An employee will now only need to work 20% of their usual hours in order to receive a grant under the JSS.
  • The employers will need to contribute just 5% of the employee’s salary for the unworked hours (up to a maximum of £125 per month) and the government will pay 62% (up to a maximum of £1,541.75) of the salary for the period when the employee is not working.

The JSS has also been split into two parts: “JSS Open” and “JSS Closed.” This is in response to the UK government’s recently instated tier system, whereby each region of the country is designated one of three “tiers” according to the severity of the COVID-19 risk in that area and local restrictions are imposed accordingly. The revised details described above can be referred to as the JSS Open scheme and apply to those regions in Tiers 1 and 2, where businesses are allowed to stay open but are subject to certain COVID-19-related restrictions.

The JSS Closed scheme applies to UK regions in the highest Tier 3 alert level, under which certain businesses are legally required to close. The following apply to the JSS Closed scheme:

  • The government will pay two thirds of the wages of an employee who is unable to work due to the restrictions (up to a maximum of £2,083.33 per month).
  • Employers will not have to contribute anything to their employees’ wages (but will have to pay the national insurance and pension contributions on the amount paid to the employee).

The JSS is still intended to run from 1 November 2020 through 30 April 2021.


It has been widely reported that numerous employers have abused the CJRS since it was announced on 20 March 2020. HM Revenue and Customs (HMRC) believes that 5–10% of money paid out through the CJRS—up to approximately £4 billion—may have been paid out to fraudulent or mistaken claims. On 23 October 2020, the UK’s National Audit Office published a report stating that criminal gangs might also have been responsible for stealing between 2.5% and 5% of CJRS money. Whilst the CJRS is due to come to an end on 31 October 2020 and will be replaced by the JSS, HMRC has indicated that it expects to pursue 27,000 “high risk” claims and conduct 10,000 investigations of companies by the end of 2020.

The Finance Act 2020, which was enacted on 22 July 2020, introduced civil penalties for employers found to have fraudulently claimed money from the CJRS. However, as a result of the scale of abuse of CJRS funds, HMRC introduced a 90-day amnesty period through 20 October 2020, during which employers could confess to HMRC that they benefited from CJRS money to which they were not entitled. Employers found to have knowingly benefitted from CJRS funds to which they were not entitled but that did not inform HMRC during the amnesty period will be subject to an income tax charge equivalent to the full amount of the CJRS grant they were wrongly paid.


In an attempt to avoid further fraudulent and erroneous claims made in respect of the UK government’s latest support measure, HMRC has indicated two changes to be applied to the JSS:

  • HMRC may withhold some payments while checking claims (with the CJRS, the policy was to make payments first and confirm claims later).
  • HMRC may inform employees directly of details of the claim, a move which is hoped will prevent employers from misleading staff.

As a result, employers are advised to keep records of any claims made for relief under either of the UK government’s job protection schemes in case a claim is challenged by HMRC.

Trainee solicitor Ben Rouse contributed to this LawFlash.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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