How the new Job Support Scheme and other Government financial packages can help your business
Recent months have seen the Government support small businesses through the Coronavirus Job Retention or Furlough scheme. In this article, Chadwick & Company founding Director, Michael Chadwick, summarises the Government’s new financial support packages.
Job Retention Scheme – October furlough claims
The Government’s Job Retention Scheme, also more commonly known as the ‘furlough scheme’, finishes at the end of October 2020. From September, the level of Government support reduced from 80% of an employee’s gross wage to 70%, with the employer asked to pay the missing 10%. Then in October, the furlough claim is 60% of an employee’s gross salary, with the employer once again expected to reimburse at least 20% of wages, plus the Employers National Insurance and Pension Contributions.
I am pleased to confirm we will continue to submit your applications for the October furlough scheme. We can do this upon receipt of your facts and figures as set out in previous emails. It is important to emphasise that this is the last furlough claim available to businesses under the Job Retention Scheme.
New Job Support Scheme
The Governments new Job Support Scheme (JSS) starts on 1 November and will run until the end of April 2021. We will be able to make claims on your behalf from December 2020. The grants will only be available in arrears after employees have been paid their wage and this has been confirmed to HMRC via a real time information payroll submission. This is the normal procedure for any PAYE scheme.
Below is the list of further factors which determine how the scheme will operate and who is eligible:
- The employee must have been on the RTI payroll on or before 23 September.
- The employee must work at least a third of their normal hours. This time is paid for in full by the employer.
- For the time the employee doesn’t work, the remainder is split three ways:
- The first third is topped up by the employer
- The second third is lost by the employee and will not be reimbursed
- The final third is paid by the state, however the maximum they will provide is £697.92 per month.
- Office holders and directors of the company are eligible to claim this Government support.
- Neither the employee or the employer need to have used the previous furlough scheme.
- National Insurance and pensions contributions will not be paid by the scheme and the expectation is that employers cannot top up salaries.
- Employees can work flexibly; potentially rotating on and off the JSS.
As an example, imagine an employee who has a gross salary of £2,000 per month. The table below outlines how much they would receive working a third of their normal hours, half of their normal hours and three-quarters of their normal hours.
|% of usual hours worked||Employer pays||Employer Top up||Government Grant||Employee Receives|
If your business is forced to close
If your business is forced to shut due to Coronavirus restrictions, then the Government will pay 67% of your employee’s wages. It is important to note here that this applies only to businesses that have been told to close, rather than those who choose to close because of a lack of business. We will give more details on this as and when the Government announce them.
£1,000 Job Retention Bonus
This bonus can be claimed between 15 February and the end of March 2021. Employers will be able to claim for every member of staff who has been furloughed in the period between March and October 2020. Applications for the Job Support Scheme will not impact the bonus.
We would like to thank all clients for their co-operation and support during what is one of the toughest periods of business the UK has ever known.
If you have any queries on the new Job Support Scheme or any of the other Government support packages, please let our Payroll team or your Accounts Manager know and we will be happy to assist. You can also read more about us and our services here. You can also email or call us on 0161 370 9600.