Job Support Scheme Expanded To Firms Required To Close Due To Covid Restrictions
10th October 2020
The government's Job Support Scheme (JSS) will be expanded to protect jobs and support businesses required to close their doors as a result of coronavirus restrictions, the Chancellor announced today, 9 October.
Job Support Scheme will be expanded to support businesses across the UK required to close their premises due to coronavirus restrictions.
government will pay two thirds of employees' salaries to protect jobs over the coming months.
cash grants for businesses required to close in local lockdowns also increased to up to £3,000 per month.
Under the expansion, firms whose premises are legally required to shut for some period over winter as part of local or national restrictions will receive grants to pay the wages of staff who cannot work - protecting jobs and enabling businesses to reopen quickly once restrictions are lifted.
The government will support eligible businesses by paying two thirds of each employees' salary (or 67%), up to a maximum of £2,100 a month.
Chancellor of the Exchequer, Rishi Sunak, said:
Throughout the crisis the driving force of our economic policy has not changed.
I have always said that we will do whatever is necessary to protect jobs and livelihoods as the situation evolves.
The expansion of the Job Support Scheme will provide a safety net for businesses across the UK who are required to temporarily close their doors, giving them the right support at the right time.
Under the scheme, employers will not be required to contribute towards wages and only asked to cover NICS and pension contributions, a very small proportion of overall employment costs. It is estimated that around half of potential claims are likely not to incur employer NICs or auto-enrolment pension contributions and so face no employer contribution.
Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days.
The scheme will begin on 1 November and will be available for six months, with a review point in January. In line with the rest of the JSS, payments to businesses will be made in arrears, via a HMRC claims service that will be available from early December. Employees of firms that have been legally closed in the period before 1 November are eligible for the CJRS.
The scheme is UK wide and the UK Government will work with the devolved administrations to ensure the scheme operates effectively across all four nations.
This comes alongside intensive engagement with local leaders today on potential measures are coming in their areas.
In addition to expansion of the JSS, the government is increasing the cash grants to businesses in England shut in local lockdowns to support with fixed costs. These grants will be linked to rateable values, with up to £3,000 per month payable every two weeks, compared to the up to £1,500 every three weeks which was available previously. This could benefit hundreds of thousands of businesses, including restaurants, pubs, nightclubs, bowling alleys and many more.
The devolved administrations in Scotland, Wales and Northern Ireland will benefit from a £1.3 billion increase to their guaranteed funding for 2020-21 - allowing them to continue their response to Covid-19 including through similar measures if they wish.
These measures will sit alongside the original JSS - which is designed to support businesses that are facing low demand over the winter months - and the £1,000 Job Retention Bonus (JRB) which encourages employers to keep staff on payroll.
They build on the government's wider package of unprecedented measures to help protect, create and support jobs through the pandemic, to ensure that nobody is left without hope or opportunity.
Further guidance on the scheme will be set out by HMRC in due course.
This scheme will cover 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 businesses that are required to provide only delivery and collection services from their premises, or food and drink outdoors from their premises. 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.
Under the scheme, employees will need to be furloughed for a minimum of seven consecutive days at any given time and the payments to employers will be made monthly in arrears.
The government is now making this scheme more generous so that businesses receive up to £3,000 per month, rather than up to £1,500 per three weeks, and they are eligible for payment sooner, after only two weeks of closure rather than three.
Small businesses with a rateable value of or below £15,000 can now claim £1,300 per month; medium sized businesses with a rateable value between £15,000 and £51,000 can claim £2,000 per month; and larger businesses can claim £3,000.
The government is also extending the scheme to include businesses which have been forced to close on a national rather than a local basis.
In July we announced an unprecedented guarantee that the devolved administrations in Scotland, Wales and Northern Ireland would receive a minimum of £12.7 billion in additional resource funding this year.
Today the UK government is uplifting that by £1.3 billion, to at least £14 billion. This means at least £7.2 billion for the Scottish Government, £4.4 billion for the Welsh Government and £2.4 billion for the Northern Ireland Executive, on top of their Spring Budget 20 funding.
We will also continue to help local authorities. Those at the highest levels of incidence will continue to receive targeted funding based on population size to support test, trace and contain activities at this stage of the national Covid-19 response. This is on top of £3.7 billion in grants to address Covid-related pressures, and £300 million for local authorities to develop outbreak plans, already allocated across England.
The government has previously committed £400 million to support local authorities' Test, Trace and Contain Activities in England:
£300 million has already been allocated for local authorities to develop local outbreak plans
the remaining £100 million is being allocated to local authorities as ‘surge funding’ in areas of local restriction
£20 million of this £100 million has already been allocated based on population size, including to local authorities in Leicester, Lancashire, the North East, Merseyside, and the West Midlands
Broader government support to local authorities in England due to Covid-19 includes:
over £3.7 billion of un-ringfenced grant funding to help them respond to pressure across all their services
over £1.1 billion ringfenced to support social care providers, helping to tackle the spread of the virus
a down payment of £50 million to set up and run the Test and Trace Support Payment - £500 for low-income workers who can’t work from home and are told to self-isolate - and we will fully fund the costs of this scheme, including £15 million in discretionary funds
we’re providing a further £30 million to LAs improve compliance with and enforcement of non-pharmaceutical interventions (such as self-isolation and business closures) over the next four months, including through COVID Marshalls
Job Support Scheme Expansion for Closed Business Premises
1. What is it?
• The Job Support Scheme (JSS) is being expanded to provide temporary support to businesses whose premises have been legally required to close as a direct result of Coronavirus restrictions set by one or more of the four governments of the UK.
• This expansion of the JSS will help businesses through the period they are affected by these restrictions, supporting the wage costs of employees who have been instructed to and cease work in eligible premises and enabling those premises to reopen as quickly as possible when they can. It will help protect employee incomes, limit unemployment and maintain employer / employee matches.
• The JSS is available to employers for six months, from 1 November 2020 and will be reviewed in January. Further guidance will be published in the coming weeks.
2. Who is eligible?
• In line with the rules for the JSS already announced: all employers with a UK bank account and a UK PAYE scheme registered on or before 23 September 020 can claim the scheme. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before this date.
• This scheme will cover 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.
• The scheme will pay a grant to the employer calculated on the number of eligible employees who have been instructed to and cease work at the relevant premises.
Employers will only be able to use the scheme for employees who cannot work (paid or unpaid) for that employer.
• Employers must be instructed to and cease work for a minimum of 7 consecutive (or calendar) days. An employee can return to work at a later date.
• 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 equired to make further contribution to wage costs. However, employers can
top up employee pay if they wish.
• Businesses required to close as a result of specific workplace outbreaks by local public health authorities are not eligible for this scheme.
• In line with the rules of the JSS already announced, neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme, our expectation is that large employers using the Job Support Scheme will not be making capital distributions, such as dividend payments or share buybacks,
whilst accessing the grant. Further details will be set out in uidance.
• Similar to the Job Support Scheme, where employees receive two-thirds of their wages for time not worked, the grant per eligible employee available from the UK Government is two-thirds of their normal pay up to a limit of £2100 per month. Further detail on how normal pay is calculated will be set out in guidance.
• Your employer can claim under the rules announced today (9 October) if their premises are closed. When premises re-open, employers can claim under the JSS for firms facing reduced demand under the criteria set out on 24 September.
• In line with the announced JSS, employers will be able to claim the Job Retention Bonus for employees provided they are eligible and previously part of the CJRS. JSS grants can be used by employers to pay an employee's wages and help meet the JRB Minimum Income Threshold.
• 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.
3. What does the grant cover?
• The employer must use the scheme to cover their employees' wages and pay relevant payroll taxes. The whole of the grant must be used to meet employee costs.
• The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer.
• Payments will be made in arrears, reimbursing the employer for the Government’s contribution.
4. How can I claim?
• This is a temporary scheme, available to employers from 1 November 2020 for 6 months and will be reviewed in January.
• Employers will be able to make a claim on a monthly basis online through gov.uk from December 2020 and this will be reviewed in January 2020.
5. HMRC checks
• 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 scheme with the relevant 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.
• HMRC intend to publish the name of employers who have used the scheme, and employees will be able to find out if their employer has claimed for them under the scheme. HMRC will continue to operate a hotline for individuals to make reports of any fraudulent claims they may be aware of.