CORONAVIRUS UPDATE
Job Support Scheme – Update
What Is It?
The Job Support Scheme is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees in the workforce.
The company will continue to pay its employee for time worked, but the burden of hours not worked will be split between the employer, the Government and the employee.
The Job Support Scheme comes into play from 1st November 2020 and will cover two scenarios;
Scenario A
The UK Government will top up wages for those employees working shorter hours than their ‘normal hours’ for businesses facing lower demand due to COVID-19.
- Employees must work at least 20% of their usual hours.
- For every hour not worked the Government will cover 61.7% of employee’s usual pay (capped at £1,541.75 pm)
- For every hour not worked the employer must cover at least 5% of employee’s usual pay.
Scenario B
The UK Government will also provide financial support for those employees who cannot work as a result of their employer being forced to close under Covid-19 regulations. This will be through the employer’s PAYE Scheme.
- The Government will pay two thirds of each employee’s salary up to a monthly maximum of £2,100.
- No employer salary top up will be required.
- Business must be required legally to close as part of local or national restrictions and employees must be off work for a minimum of 7 consecutive days.
- This includes businesses that are required to provide only delivery and collection services from their premises or food and drink outdoors from their premises.
For both Scenario A and B
- Employee must not be on a redundancy notice.
- Employer will be reimbursed in arrears.
- Employer must have a UK PAYE scheme and UK bank account.
- All small and medium enterprises will be eligible.
- The employee must have been on the employer RTI submission made to HMRC on or before 23rd September2020.
- Employers must agree the new scheme with staff in writing, including any changes to the employment contract. This agreement must be made available to HMRC on request.
- Larger businesses can claim if can demonstrate adversely affected by COVID-19. The government expects large employers not to make distributions while using the scheme.
- Employers can still claim the Job Retention Scheme bonus in 2021, even if claiming under the Job Support Scheme.
- The employer will be required to cover the cost of the employers NIC and pension contributions.
- The claims to be made in arrears through a HMRC Claims portal to be available from early December 2020.
The MDH team are here to support you
If the above will have an impact on your of your business, please book in a 30 minute call with Michael or Natalie to discuss.
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