Just two weeks after the Chancellor, Rishi Sunak, set out the Government's new Job Support Scheme (JSS), which will replace furlough from November 2020, an expansion has been announced. This announcement was made on 9 October 2020 in the context of potential new national or local lockdown measures to restrict transmission of Covid-19.
One of the criticisms of JSS is that it does little to support a business which has had to shut due to lockdown measures imposed by the Government. A key example of this would be the current lockdown measures imposed in Northern Ireland which has forced many restaurants and other businesses to close for four weeks. These businesses, and the jobs that they support, may be perfectly viable but they are just unable to operate due to temporary restrictions. The Chancellor has sought to address this with the recent announcement which confirms that the Government will cover two thirds of the wages (up to £2,100 per month) of eligible employees. This new lockdown JSS will sit alongside the part-time JSS as well as the Job Retention Bonus.
The expansion is for businesses that, as a result of restrictions set by one or more of the four governments in the UK, are legally required to close their premises. This includes premises restricted to delivery or collection only services from their premises. Employers that are eligible for JSS in line with the rules previously announced must instruct eligible employees to cease work at the relevant premises for a minimum of 7 days and can only claim for employees who cannot work.
Claims must not overlap and must be made monthly in arrears. These payments will be taxable, and employers will be required to cover employer NICS and automatic enrolment pension contributions in full, where applicable, but are not required to make further contribution to wage costs. However, employers can top up employee pay if they wish. Interestingly the original guidance for the JSS stated that it was the Government's expectation that employers could not top up wages. Potential discrepancies such as this show that the Government is producing these schemes at pace and a number of questions will be outstanding from employers until the guidance is produced (and in all likelihood thereafter as well).
Businesses required to close as a result of specific workplace outbreaks by local public health authorities are not eligible for this scheme. Neither the employer nor employee needs to have previously used the Job Retention Scheme to be eligible. However, to be eligible, employees must be employed and an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 23 September 2020. Also, the Government has stated that it expects that large employers using JSS will not be making capital distributions, such as dividend payments or share buybacks, whilst accessing the grant.
As was outlined previously, employees cannot be on notice of redundancy during the period in which the claim is made. Employer will be eligible to claim the Job Retention Bonus for employees on JSS and can use the JSS grant towards meeting the minimum income threshold for the Job Retention Bonus. In line with the rest of JSS, payments to businesses will be made in arrears via an HMRC claims service that will be available in early December. The scheme will begin on 1 November 2020 and will be available for six months, with a review point in January 2021. Further guidance will be produced by HMRC on this in due course.
Overall this expansion will provide comfort to many employers, particularly in the hospitality industry where government imposed closures are on the horizon this winter. However, there will still be businesses and employees that cannot avail of support. For example, it is not clear that JSS will be of any assistance in the situation where a business is not legally required to close but there is simply no work for some or all of its employees right now due to the current circumstances. Employers will still have unanswered questions which will hopefully be resolved by the guidance when it is produced.
This article has been produced for general information purposes and further advice should be sought from a professional advisor. Please contact our Employment Team at Cleaver Fulton Rankin for further advice or information.
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