Following on from the Prime Ministers announcement earlier this week, yesterday we saw the Chancellor unveil a package of measures that are designed to help businesses continue to cope with the COVID-19 pandemic.
With the furlough scheme due to come to an end on 31st October 2020, the support available to assist employers in protecting jobs was resting with the Job Retention Bonus Scheme, which we have previously given details on (http://www.nucleushr.com/chancellor-announces-next-job-retention-initiative-but-is-it-enough-for-employers/). Rushi Sunak was keen to stress that the new scheme was not designed to support jobs that are not viable for Employers and pointed out that the Government was unable to save every job in the current British economy. Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria. What is the scheme? The company will continue to pay its employee for time worked, but the burden of hours not worked will be split between the employer and the Government (through wage support) and the employee (through a wage reduction), and the employee will keep their job. The Government will pay a third of hours not worked up to a cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages. When will the scheme run from and to? The scheme will open on 1 November 2020 and run for 6 months, until April 2021. Who is eligible? All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme. Larger businesses will have to meet a financial assessment test, so the scheme is only available to those whose turnover is lower now than before experiencing difficulties from Covid-19. There will be no financial assessment test for small and medium enterprises (SMEs). Employees must be on an employer’s PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020. In order to support viable jobs, for the first three months of the scheme the employee must work at least 33% of their usual hours. After 3 months, the Government will consider whether to increase this minimum hours threshold. Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of seven days. What does the grant cover? For every hour not worked by the employee, both the Government and employer will pay a third each of the usual hourly wage for that employee. The Government contribution will be capped at £697.92 a month. As with the furlough payments, the grant payments will be made in arrears, reimbursing the employer for the Government’s contribution. The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer. Employees who have previously been furloughed, will have their underlying usual pay and/or hours used to calculate usual wages, not the amount they were paid whilst on furlough. Employers must pay employees their contracted wages for hours worked, and the Government and employer contributions for hours not worked. What does it mean to be on reduced hours? The employee must be working at least 33% of their usual hours. For the time worked, employees must be paid their normal contracted wage. For time not worked, the employee will be paid up to two-thirds of their usual wage. Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee. How can I claim? The scheme will be open from 1 November 2020 to the end of April 2021. Employers will be able to make a claim online through Gov.uk from December 2020. They will be paid on a monthly basis. HMRC will check claims. Payments may be withheld or need to be paid back if a claim is found to be fraudulent or based on incorrect information. Grants can only be used as reimbursement for wage costs actually incurred. Employers must agree the new short-time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request.
As with everything in 2020, the only constant is change. If you need any assistance with catching up, keeping up or simply confirming your understanding, please do email firstname.lastname@example.org or call 07960 418494, we look forward to supporting you.