The Job Retention Scheme (JRS) winds down at the end of October. It will be followed, for the next six months, by a new job support scheme, which subsidises the wages of employees working at least a third of their normal hours, to further support viable UK employers who face lower demands due to COVID-19.
In an attempt to keep employees attached to the workforce, the Government will be introducing a new Job Support Scheme from 1 November 2020, where employees will need to work a minimum of 33% of their usual hours.
For every hour not worked the employer and the Government will each pay one third of the employee’s usual pay. The government contribution will be capped at £697.92 per month.
Employees using the scheme will receive at least 77% of their pay (where the Government contribution has not been capped) & the employer will be reimbursed in arrears for the government contribution. The employee must not be on a redundancy notice.
The scheme will run for six months from 1 November 2020 and is open to all employers with a UK bank account and a UK PAYE scheme.
All Small and Medium-Sized Enterprises (SMEs) will be eligible. Large businesses will be required to demonstrate that their business has been adversely affected by COVID-19, and the government expects that large employers will not be making capital distributions (such as dividends), while using the scheme.
For employers, this is a much less generous scheme than the furlough scheme, which it is replacing.
Employees will receive 77% of their gross salary for doing a third of their normal hours. For most that will translate into well over 80% of their net pay.
There will also be more help for the self-employed, likely in the form of another grant; although details are yet to be announced. However, early indications are that they will receive 20% of their taxable profits for the period between November to January, then a second grant will cover February to April 2021, which will be adjusted to respond to the changing circumstances.
As the Job Support Scheme becomes active, you can rely on Taxfile to continue calculating & submitting your business’s payroll information to HMRC with the new scheme.
If you are interested in having a payroll scheme for your business, please call us on 020 8761 8000.