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The Chancellor of the Exchequer, Rishi Sunak, has announced major changes to the Job Support Scheme in response to the changing COVID-19 landscape.
The Job Support Scheme Open starts from 1st November and will run for six months. It is designed to support businesses that can operate safely but are facing lower demand over the winter months due to COVID-19.
Under the scheme, the minimum hours required for employees to work has been reduced from 33% to 20% and the employer contribution for non-worked hours has been lowered from 33% to 5%.
The Government will pay 61.67% of hours not worked up to a cap of £1,541.75 per month, with the employer contributing 5% of non-worked hours up to a cap of £125.00 per month. These caps are driven by a monthly base amount of £3,125.00.
As a result, an employee will earn a minimum of 73% of their normal wages where these usual wages do not exceed the base amount.
As before, the scheme is open to all employers with a UK bank account and a UK PAYE scheme but large businesses will be required to demonstrate that their business has been adversely affected by COVID-19.
Importantly, the Job Support Scheme Open will be available to businesses even if they have not previously used the furlough scheme.
For an employee to be eligible, they must be on the company payroll before midnight on 23rd September 2020. In other words, a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020.
Employees will be able to be moved on and off the scheme and do not have to be working the same pattern each month. However, the minimum claim period will be seven consecutive days.
Along with the 5% of non-worked hours, the employer will be responsible for the full Employer’s National Insurance and automatic enrolment pension contribution.
In the same manner as the Job Retention Scheme, the grant payments reimbursing the element covered by the Government will be made in arrears.
For the worked hours, the employer must pay the employees their contracted rate. For the non-worked hours, the employer must pay the employees the Government and employer contributions in full. However, employers can top up employee’s wages above the 5% contribution at their own discretion.
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.
Employers using the Job Support Scheme Open will also be able to claim the Job Retention Bonus which offers a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed and paid through to the end of January 2021.
It is important to recognise that short time working arrangements are a change to the employee’s employment contract. As a result, this can only be done by mutual accord and with the signed agreement of the employee. HMRC may ask for these agreements to be made available.
As an example, under the scheme, an employee with a monthly gross salary of £1,800.00 who can work for one day a week would be paid £360.00 for the time worked. For the time not worked, the employer would pay £72.00 and the Government would pay £888.05. As a result, the employee would receive £1,320.05 gross pay.
Earlier in the month, the Chancellor announced that there will be a Job Support Scheme expansion for closed business premises where the business is legally required to close as a direct result of COVID-19 restrictions. The Job Support Scheme Closed will run under the same eligibility criteria.
However, businesses required to close as a result of a specific workplace COVID-19 outbreak are not eligible for this scheme.
For each eligible employee, the Government will cover two-thirds of their normal pay up to a limit of £2,083.33 per month.
Although there is no requirement for the employer to top up this amount, they will still be responsible for the Employer’s National Insurance and automatic enrolment pension contribution.
As with the Job Retention Scheme, these grants will be payable in arrears. The first claim for pay periods ending and paid in November will be able to be submitted from 8th December. HMRC are due to be publishing further guidance on the claim process this week.
Negotiations with our partners in the European Union towards a trade deal seem to be faltering, increasing the probability of a “No Deal Brexit”.
Despite a sneaking suspicion that it is in both sides interests to pull a deal from the fire at the last minute, there will be guaranteed changes from 1st January 2021.
Businesses with an EU connection will have a new relationship and it is vital to be prepared. The reality is that, notwithstanding the other challenges businesses are currently facing, the UK will be outside of the single market and customs union in what is now a matter of days.
The government has launched a website https://www.gov.uk/transition with a checker tool where you can see the impact on you and your business.
As the website apocalyptically states – Time is Running Out. As of today, there are seventy-three days to go until the end of the transition period and there will be no extension, so you need to act now.
Whatever happens, there are guaranteed to be changes to:
More than that, you need to consider other factors from where personal data is stored and whether there is any impact on your accounting and reporting requirements to having a GB sticker on the back of your vehicle.
We have run a simulation for a professional services company below to give you an idea of the matters to consider and we would urge you to do the same for your business and to subscribe for updates at the end of the process.
How to get ready for new rules in 2021: Your results
What you need to do may change
Subscribe to email updates about changes that may affect you and get a link to your results
Your business or organisation
Because you said:
Check if your employees need a visa or work permit and that they meet professional requirements for the country they’re going to
You or your employees might not be able to enter or work in some countries.
More information:
Providing services to any country in the EU, Iceland, Liechtenstein, Norway or Switzerland from 2021
Check if you need to change your contract to keep accessing personal data from the EU, Norway, Iceland or Liechtenstein
You may not be able to access personal data from the EU without the right arrangements in place.
More information:
Using personal data in your business or organisation from 2021
Appoint a representative in the EU if you run a large UK-based online business providing digital services in the EU
You risk being fined if you do not have a representative to help you meet online security standards.
More information:
NIS Regulations – what digital service providers in the UK should do from 2021
Check what you need to do if you own a UK legal services business
You risk not being able to continue providing legal services in the same way if you do not meet new requirements.
More information:
Legal services business owners from 1 January 2021
Check what you need to do to continue to work or provide legal services in the UK, if you’re a lawyer with a qualification from the EU, Norway, Iceland or Liechtenstein
You risk not being able to continue working or providing legal services in the UK if you do not prepare.
More information:
EU lawyers in the UK from 1 January 2021
Check the rules for providing online services to the EU, Norway, Iceland or Liechtenstein
You may be breaking the law if you do not follow the rules in the country you provide online services to.
More information:
The eCommerce Directive after the transition period
Check which carbon pricing policies you need to comply with
You risk not complying correctly with emissions reporting and carbon pricing regulations, which could lead to a fine.
More information:
Meeting climate change requirements from 2021
Check if you need to change how you do accounting and reporting
You risk breaching reporting requirements in the EU, Norway, Iceland or Liechtenstein if you do not make any changes you need to.
More information:
Accounting for UK companies from 1 January 2021
Check the rules for reporting unfair trade practices using the UK’s new trade remedies service
You risk being affected if imported goods are dumped on the UK market or are benefiting from subsidies – or if there is a sudden increase in imports to the UK of a certain product.
More information:
Applying for a trade remedies investigation
Get your UK qualification recognised if you want to work in a regulated profession in the EU, Norway, Iceland or Liechtenstein
You risk not being able to continue working or providing services in the EU if you do not prepare.
More information:
Recognition of professional qualifications
You and your family
Visiting the EU
Because you said:
Check if you need a visa or work permit and meet the professional requirements to travel to the EU, Switzerland, Norway, Iceland or Liechtenstein for work
You may not be able to enter or work in some countries if you do not meet the requirements.
More information:
Visit Europe from 1 January 2021: Business travel
Check whether your mobile phone company has changed its mobile roaming charges before travelling to the EU, Switzerland, Norway, Iceland or Liechtenstein
You may be charged for using your mobile device in the EU, Switzerland, Norway, Iceland or Liechtenstein if your operator has reintroduced roaming charges.
More information:
Visit Europe from 1 January 2021
Check for disruption to your journey before you travel between the UK and the EU – border checks may take longer
If you do not allow enough time, you could miss your flight, train or ferry.
More information:
Visit Europe from 1 January 2021
Check if you need an International Driving Permit before you drive in the EU, Switzerland, Norway, Iceland or Liechtenstein
You could get a fine or your vehicle could be seized if you drive without the correct documents.
More information:
Put a GB sticker on the back of your vehicle if it’s registered in the UK, even if your number plate already shows GB with a Euro symbol
You could get a fine if you do not have a GB sticker when you need one.
More information:
Driving in the EU from 2021 – GB stickers and number plates
Visiting Ireland
Because you said:
Check whether your mobile phone company has changed its mobile roaming charges before travelling to the EU, Switzerland, Norway, Iceland or Liechtenstein
You may be charged for using your mobile device in the EU, Switzerland, Norway, Iceland or Liechtenstein if your operator has reintroduced roaming charges.
More information:
Visit Europe from 1 January 2021
What you need to do may change
Subscribe to updates about changes that may affect you and get a link to your results.