HM Revenue & Customs publishes further details of the Job Support Scheme

HM Revenue & Customs (HMRC) has published further details of the Job Support Scheme (JSS) announced by the Chancellor at his Winter Economy Statement in Parliament on Thursday 24 September.

The JSS is intended to support businesses facing reduced demand over the winter as a result of the Coronavirus crisis to keep employees in ‘viable’ jobs on short-term working.

The scheme will launch on 1 November 2020 – the day after the Coronavirus Job Retention Scheme (CJRS) closes – and will run for six months until the end of April 2021.

It will be open to all SMEs, but only to large businesses that can show that they have been adversely affected by the Coronavirus crisis through reduced revenues. Large businesses will be expected not to make capital distributions, including dividends or share buybacks, while using the JSS.

Employees claimed for through the JSS must have been on an employer’s PAYE payroll on 23 September 2020, meaning their employer must have included them on an RTI submission on or before that date.

They cannot be on notice of redundancy or be made redundant while in receipt of the JSS.

Employees must work at least 33 per cent of their usual hours and be paid in full for those hours by their employer. The employer must also then pay one-third of the hours not worked – an amount which will be matched by the Government up to a cap of £697.92 a month. Employees will then forego pay for one-third of the usual hours that they are not working. This means they will be paid at least 77 per cent of their usual wages, even if they are on working 33 per cent of their usual hours.

Employers meanwhile, according to the HMRC document, must pay a total of 55 per cent of an employee’s usual wages in return for 33 per cent of their usual hours. Therefore, it could cost an employer less to let go of two staff and keep one working full-time than to have three staff on short-time working through the JSS. The scheme has similar implications, even where employees are working a much larger proportion of their usual hours.

HMRC has published a table, setting out how the scheme will work at different levels of short-time working:

Hours Employee Worked 33 per cent 40 per cent 50 per cent 60 per cent 70 per cent
Hours Employee Not Working  

67 per cent

 

60 per cent

 

50 per cent

 

40 per cent

 

30 per cent

Employee Earnings (% of normal)  

78 per cent

 

80 per cent

 

83 per cent

 

87 per cent

 

90 per cent

Gov’t Grant (% of normal wages)  

 

22 per cent

 

 

20 per cent

 

 

17 per cent

 

 

13 per cent

 

 

10 per cent

Employer Cost (% normal wages)  

 

55 per cent

 

 

60 per cent

 

 

67 per cent

 

 

73 per cent

 

 

80 per cent

Employers will need to agree short-time working arrangements with staff and make any necessary changes to contracts of employment with documents made available to HMRC on request.

HMRC says that it intends to notify employees directly with full details of the claims made in respect of them.

Link: Job Support Scheme Factsheet