The Changes to the Job Support Scheme Extended to Support Businesses Required to Close Due to the Coronavirus Restrictions

Job Support Scheme

November 06, 2020

The winter of 2020 has been predicted to be a difficult winter for businesses worldwide with the pandemic continuing to raise the toll of those infected. Considering the imposed lockdowns and the problems businesses are facing retaining their current employee base, it is no wonder that the government has already thought ahead on how to save jobs. With the economy dwindling the focus no longer is on making profits but to see that the current breadwinners are able to provide their families with a comparatively debt free existence by honouring their present debts. This is where the Job Support Scheme also known as the JSS will play a huge role as the scheme will be expanded so that jobs stay protected even as businesses are forced to close down due to Covid-19 restrictions.

However, important to note is that the JSS has received many revisions. First the employers as well as the government were to pay 1/3rd of the usual pay of the employees for the hours not worked granted that the employee worked around 33% hours that week. But this model was for an economy that was gradually waking up from the pandemic and getting back to its feet. With the lockdown being reimposed due to the worries pertaining to high infection rates, the JSS scheme has evolved as well. Now, it is far different from the original scheme and yet, employers would certainly agree that it is all the better.

What are the changes to the Job Support Scheme (JSS)?

A few salient points regarding the same have been noted below. Information in detail has been provided after that.

  • The scheme was set to begin on 1st November 2020 but with the extension of the furlough scheme this has been pushed back a month
  • The JSS has now been bifurcated into two parts viz. JSS Open and JSS Closed depending on whether the business is situated in a lockdown area. There may be further revisions to the scheme structure by the time it begins which is now estimated to be December 2020.

Due to all the changes that are constantly being introduced (albeit for the better), it has become increasingly harder for employers to accustom themselves to the changes. This is where having someone look into our business accounting can help you. Doshi Accountants believes in keeping their clients up to date with the dynamic changes to the legislation so that they are always compliant.

Facts about the Job Support Scheme (JSS)

As per the previous information from the HMRC the scheme was set to run for 6 months that is till January 2021

The scheme has been introduced with two variations – JSS Open and JSS Closed

The government has made the scheme easier for the employers by being more generous to them as they no longer need to pay 1/3rd of the employees pay as the former Wage Subsidy Scheme had proposed.

The JSS Open

  • This is specifically set for those businesses where the employee is to work for a shorter duration of hours. This is due to the fall in demand due to the coronavirus pandemic.
  • To avail this the employees, need to have worked for at least 20% of the hours that they usually work.
  • The employer would of course, have to pay the usual amount for the hours that the employees do work. However, the government has agreed to pay a generous 61.67% for the usual hours of the employee that were not worked. There is a cap amount here of £1,541.75 for a month.
  • Thus, employers actually need to pay only 5% that too for the usual hours that are worked but were not worked and this works out to approximately £125 a month at the maximum.
  • If the employer wants, this amount can be further topped up
  • Thus, the employee will at least get for the hours not worked, two thirds of what their usual pay is. This provides some relief to the employee as the wages are stopped from dropping considerably.

To note: The cap amounts actually reduced in proportion to those hours that are not worked, Also, the employer unlike in the previous furlough schemes, will have to pay the National Insurance and Work Place Pension contributions that are applicable. 

JSS Closed

  • This scheme has been designed for those businesses whose premises would have to be closed due to legal requirements because of the restrictions imposed by the government in wake of the coronavirus pandemic. These restrictions would cover those imposed by any one of the governments (4 in number) of the UK. Also, premises that now have been restricted to only delivery or collection services or those who are not allowed to provide food and drinks outside too will be included.
  • Here, the government will fund around 2/3rd if the usual wages of the employees for the time that they are unable to work. The cap amount here is £2,083.33 a month.
  • In this case since the business is closed the employer does not have to contribute on a mandatory basis. But if the employer wants, he or she can choose to make a voluntary top-up payment.
  • However, the National Insurance as well as the Work Place Pension amounts will have to be contributed by the employer.

 Undoubtedly by the time the JSS scheme does officially start there would be more changes. That is why a small business accountant or accounting services have become the need for the hour as how much time can an employer expend in keeping up to date with the HMRC? Doshi Accounting can prove invaluable here, as we can handle your accounting, taxation, VAT, bookkeeping and payroll needs all under one roof!