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Coronavirus Job Support Scheme

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The Coronavirus Job Retention Scheme (furlough) is due to come to an end on 31 October 2020.  At the peak of the scheme, in May 2020, over 8.9 million workers were placed on furlough.  The scheme has been a lifeline to help those businesses which have seen a decrease in revenue over the past few months.

On Thursday, 24 September 2020 the Chancellor Rishi Sunak announced plans for the Coronavirus Job Support Scheme.  This scheme will see the government help top up the wages of workers who have had to reduce their hours over the winter months as a result of the pandemic. Sunak has confessed that they will not be able to protect all roles and this is a bid to assist those with "viable" roles.

The Scheme will commence on 01 November 2020 and us due to last for 6 months, expiring in April 2021. 

WHO IS ELIGIBLE TO RECEIVE SUPPORT?

All employers will a UK bank account and UK PAYE scheme will be eligible to claim on this scheme.  Small and medium enterprises (SMEs) will automatically qualify for the scheme.  However, larger businesses will be required to meet a financial assessment, for more information on this please contact a member of the Employment Team.

In order to qualify for the scheme, Employees must have been on the Employer's payroll on or before 23 September 2020. 

Employees are also expected to work at least one third (33%) of their usual hours. 

WHAT WILL EMPLOYEES RECEIVE UNDER THE SCHEME?

The Employee will receive full pay for each hour they are working.

For each hour that an Employee is not working, the Employer will pay one third and the Government will pay another third of the cost (the Government will contribute up to a maximum of £697.92 per month).  The Employee's will be required to forego the remainder.

Please note, the Government will not cover Class 1 employer National Insurance Contributions or pension contributions, these amounts will remain payable by the Employer.

The Government have published the illustration below to help Employees work out what they may be entitled to:

Hours Employee Worked

33%

40%

50%

60%

70%

Hours Employee not working

67%

60%

50%

40%

30%

Employee earnings (% of normal wages)

78%

80%

83%

87%

90%

Government Grant (% of normal wages)

22%

20%

17%

13%

10%

Employer Cost (% of normal wages)

55%

60%

67%

73%

80%

 

WHAT ELSE DO WE KNOW?

As we expected, Employers must agree any short time working arrangements with their employees and agree this in writing

Employers will be reimbursed in arrears for the government contributions.  Therefore we are anticipating that Employers will be unable to delay paying their Employees until after the grant has been received, but further guidance will be released on this in due course.

In a surprising change from the Coronavirus Job Retention Scheme, the employee cannot be made redundant or placed on notice during any period which the employer is claiming support for them.

HMRC will be checking each claim that is made by an Employer.  HMRC may withhold claims or require repayment for any claim that is found to be fraudulent or based on the incorrect information.

DISCLAIMER: Please note that full guidance has not yet been published on the Coronavirus Job Support Scheme and therefore is likely to adapt in the future.

Contact Us

For specific and up to date advice on how this scheme may help you, please contact a member of our Employment Team on 01522 814638.