On 22 October 2020, HM Revenue & Customs released further details on the UK Job Support Scheme (JSS), first announced in September. The JSS will now be scaled up and expanded to further support businesses adversely affected by COVID-19 and the associated lockdown restrictions.
The expanded JSS covers businesses which can now be categorised into two groups: (a) those forced to closed due to elevated restrictions pursuant to the UK’s tier system; and (b) those not required to close but forced to operate on a reduced basis because of COVID-19, either directly through lower-level restrictions or indirectly, because of decreased demand.
The twin JSS schemes will cover the period from 1 November 2020 to 30 April 2021, with a review date in January 2021. Employers will be able to make the first claims from 8 December 2020.
JSS Closed is, in effect, the new iteration of the UK government’s Coronavirus Job Retention Scheme (CJRS), set to close 31 October 2020, and offers grants to businesses under (a) above. For employees who cannot work at all directly due to COVID-19 restrictions set by one of the UK devolved nations — for example, pubs and bars (which do not operate as restaurants) in Tier 3 areas in England — will be able to have two-thirds (67 percent) of their normal pay covered under JSS Closed, subject to a cap of £2,083.83 per month.
The grant is less generous than that offered pursuant to CJRS, which provided for 80 percent of pay to be supported; i.e., employees forfeit an additional 13 percent of their normal pay than they would under CJRS. Employers may exercise their discretion to contribute toward employee pay and employees may be eligible for additional government support, such as Universal Credit, to top up their pay.
Businesses under category (b) above can claim for grants as before under the original JSS announced in September, as revised and now referred to as JSS Open. Under JSS Open, those businesses which are able to sustain viable jobs on short-time working of at least 20 percent of employees’ normal working hours — equivalent to just one day a week on a full-time basis — can claim for up to two-thirds (66.67 percent) of hours not worked, subject to a cap of £1,541.75 per month. Under the original JSS announced in September, employees had to work at least 30 percent of their normal working hours.
An employer will now also have to make a contribution of 5 percent of pay for hours not worked, subject to a cap of £125 per month (previously, this was a third of the hours not worked). The employer must also pay employer’s National Insurance contributions and any minimum pension contributions. Employers will have discretion to pay more than the minimum contribution.
Accordingly, under JSS Open, employees will receive 73.33 percent of their normal pay, where the employee earns £3,125 a month or less, and will forfeit the balance of 26.67 percent.
Conditions underwriting JSS Open and JSS Closed
Employers must seek the express, written agreement of employees to record the short-time working arrangements under the JSS Open and JSS Closed schemes. There is no condition that employers had previously applied under the CRJS to be eligible under the schemes, so businesses which experience new difficulties because of COVID-19 from 1 November will be supported.
Businesses will also be able to make claims under both schemes for different employees, whose work may be affected by COVID-19 in different ways.
All small and medium-sized companies with fewer than 250 employees are eligible under the schemes. Businesses exceeding that head-count threshold will be eligible if their turnover has fallen due to COVID-19 compared to the previous year, as evidenced by VAT returns and subject to a Financial Impact Test.
The UK government will not prohibit claims by larger businesses that make capital distributions such as dividend payments to shareholders, but discourages those businesses from doing so. There is a carve-out for UK registered charities with more than 250 employees — these employers will not have to comply with any financial impact assessment.
Fully funded public sector employers will not be able to claim grants under the schemes. However, partially funded employers will be able to claim only if their privately generated funding was adversely impacted by COVID-19.
In addition to the discrete eligibility criteria tied to each scheme, as before, employers with a UK, Channel Island or Isle of Man bank account, that have enrolled on PAYE online, will be eligible to claim grants under the schemes.
Employees who were on their employer’s PAYE payroll and had a Real Time Information payment submission notified to HM Revenue & Customs on or before 23 September 2020, may be claimed for under the schemes. Employees whose employment ceased after 23 September could be rehired by their employer and a claim could be made under the schemes, although there is no obligation on the employer to do so.
If an individual was treated as an ”employee” for income tax purposes, the individual would be considered an employee for the purposes of the schemes (accordingly, agency workers would generally be considered as employees also).