On Friday 9th October 2020, Chancellor Rishi Sunak announced an expansion to the Job Support Scheme (‘JSS’). Essentially, the JSS has been extended to protect jobs and support businesses where they are legally required to close as a direct result of Coronavirus national or local restrictions set by any UK government.

What will the extension cover?

The extension will provide additional financial support for businesses that are (or will be) legally forced to close their premises (including premises restricted to delivery or collection services only) due to government restrictions.  Closures of individual workplaces by local public health authorities due to a specific workplace outbreak are not covered by the scheme.

Employers will be able to apply for a grant to pay employees’ wages whilst they cannot work due to the premises being closed. The grant will be calculated by reference to the number of employees instructed not to work and a government contribution of two-thirds of salary, up to a maximum of £2,100 per month, for each employee.

The extension will therefore support employers who are unable to rely on the original JSS which cannot apply where businesses are forced to close.  Further details of the JSS can be found in our previous update.

Which employers can claim?

The employer eligibility requirements are similar to those under the JSS scheme but will additionally require that government restrictions have resulted in the closure of the business premises.  This means that an eligible employer must have a UK bank account and a UK PAYE scheme registered on or before 23rd September 2020.  On what basis the scheme can be used by larger employers is not yet clear but there does not at this stage appear to be an absolute prohibition.

Which employees are covered?

Only employees who have been instructed not to work (and do not work) for a period of at least 7 calendar days due the closure of premises will be covered.  The employer must have made a PAYE RTI submission to HMRC in respect of an affected employee on or before 23rd September 2020.

What must employers know?

  • Employers will not have to contribute to employees’ wages but can top up employees’ wages if desired.
  • Employers will be required to cover NICS and auto-enrolment pension contributions.
  • Employers must agree the use of the new scheme with their employees, agreeing any required changes to terms of employment. The agreement must be notified to the employee in writing.
  • Employers will not be able to make an employee redundant or give notice of redundancy in any period during which they are claiming the grant for that employee.
  • HMRC has in place anti-fraud measures including the publication of names of employers using the scheme and a hotline for reports of fraudulent use.

How do employers claim under the extension?

The extension is to take effect as an expansion to the current Job Support Scheme available to employers from 1 November 2020. 

Payments will be made in arrears to employers by reimbursing funds. From December 2020, employers will be able to claim the grant monthly using HMRC’s online platform. Employers and employees do not need to have previously used the Coronavirus Job Scheme.

Employers will be able to claim under the JSS or the extension as their circumstances change.  Both schemes will be reviewed in January. Making a claim will not affect an employer’s eligibility for an award under the Job Support Bonus Scheme.

Further Details?

The government’s fact sheet on the JSS extension can be accessed here.

A number of questions remain unanswered, including how the JSS and its extension may apply to larger employers. Detailed HMRC Guidance and a Treasury Direction are awaited in relation to both the JSS and its more recent extension.  We will report further as more detail and guidance becomes available.

You can read our earlier update for more information on the Job Support Scheme here.

Next Steps

Contact our specialist Employment Law team for legal support on the Job Support Scheme and the new Furlough Scheme. If in doubt, please take advice. You can contact the Employment team at Myerson on 0161 941 4000 or via email at lawyers@myerson.co.uk.