Coronavirus Job Support Scheme – for closed businesses
Updated: 12 Nov 2020
The guidance below has been withdrawn for the time being following the government’s decision to extend the Coronavirus Job Retention Scheme, commonly known as ‘furlough’. As furlough has now been extended into March 2021, we await further information as to whether the Job Support Scheme will be implemented to removed. As this information becomes available we will update this page accordingly.
The government’s Coronavirus Job Retention Scheme, commonly referred to as ‘furlough’, was due to an end on 31 October 2020 and replaced by the new Job Support Scheme. Our current understanding of this new support scheme is outlined below and you can find additional information about government support in our COVID-19 Resource Centre.
We await further detail on the Job Support Scheme and it is likely that there will be further changes, updates and clarifi ations to the information below, however a government policy paper can be viewed here.
Job Support Scheme expansion for closed premises
The Job Support Scheme was due to begin on 01 November 2020 and is designed to protect viable jobs in organisations that are impacted by lower demand in the coming months due to COVID-19. The scheme will initially run for 6 months until April 2021.
The scheme is designed to enable, wherever possible, employers to retain talent within their organisations until such a time that the coronavirus pandemic has abated, and businesses can return to a normal state of operations.
How the Expanded Job Support Scheme for closed business premises works
The Job Support Scheme is being expanded to provide temporary support to businesses whose premises are legally required to close as a direct result of coronavirus restrictions applied by any of the four UK governments.
This scheme does not provide support for businesses that have:
- closed due to an outbreak of the COVID-19 coronavirus or
- closed due to a lack of demand
The scheme is designed to help businesses through the periods in which they are affected by restrictions, enabling them to reopen with their workforce intact as soon as they are permitted to do so. The scheme aims to support the protection of employees’ jobs where possible and limit redundancies.
Given employers using the Job Support Scheme will be retaining their employees, they may also qualify for the Coronavirus Job Retention Bonus if eligibility conditions are met.
Understanding employer eligibility
Employers can apply under the expanded Job Support Scheme even if they have previously not applied for the Coronavirus Job Retention Scheme.
- Have a UK bank account and a UK PAYE scheme
- Be unable legally to open their premises because of restrictions imposed directly by at least one of the four UK governments. This includes premises restricted to delivery/collection only services from their premises
- Only use the scheme for employees who cannot work – the scheme will pay a grant to the employer based on the number of eligible employees who must cease work at the premises
- Be instructed to, and cease work, for a minimum of 7 consecutive (or calendar) days – employee can return to work at a later date following this period
- Cover the cost of Employer NICs and pension contributions in full (based on wages received) and in line with all current legislation
- Ensure claims do not overlap and are made monthly in arrears. They are not required to make further contributions to employee wages but may top up employees’ pay if they so choose
- Not be making capital distributions (such as dividend payments or share buybacks) whilst accessing this grant
- Employers need not have previously used the Coronavirus Job Retention Scheme. They may also qualify for the Coronavirus Job Retention Bonus, subject to the eligibility criteria
- Businesses required to close because of a workplace outbreak of COVID-19 or potentially by order of local public health authorities are not eligible for this schem
Understanding employee eligibility
- Will receive 2/3 of their wages for time not worked based on their normal pay
- A limit of £2,100 per employee per month applies to the government grant
- Wages can be covered from 1 November where their employers’ premises are closed due to government-enforced restrictions
- Will then qualify for the normal Job Support Scheme, subject to the normal eligibility criteria, when the employers’ business premises is able to reopen and resume operations
- Cannot be made redundant or put on notice of redundancy during the period in which their employer is claiming support under the JSS or the expanded JSS, in respect of that employee
What does the temporary expansion to the Job Support Scheme cover?
The grant provided by the temporary expansion to the Job Support Scheme operates as follows:
- Employers must use the scheme to cover their employees’ wages and pay all required payroll taxes. The whole of the grant may only be used to meet employee costs
- Payments will be made in arrears to reimburse employers for the government’s contribution
- Government grants under this scheme do not cover Class 1 Employer NICs or pension contributions – these remain payable by the employer, based on wages received, and the usual legal requirements must be observed
How to claim and other important points
The scheme was due to begin on 01 November 2020 and will run initially for 6 months until the end of April 2021. A review of the scheme will be undertaken prior to April 2021.
Claims can be made through gov.uk starting in December 2020 on a monthly basis and grants will be payable in arrears for wage costs actually incurred.
Employers must agree new working arrangements with their employees, notifying them in writing.
HMRC will check claims and reserve the right to withhold or demand repayment of grant payments if a claim is found to be based on incorrect or fraudulent information.
HMRC intends to publish the names of employers using the scheme, meaning employees will be able to ascertain whether their employer has claimed for them. A government hotline will be available for individuals who suspect fraudulent claims are being made.
This article is based on our understanding and interpretation (as of 03 Nov 2020) of the official government factsheet for the Job Support Scheme Expansion for Closed Business Premises, which can be downloaded here. The official government factsheet for the Job Support Scheme can also be downloaded here. This information is subject to change and further clarifications from UK government.
We want to keep you in the picture: if you have any questions about the Job Support Scheme expansion for closed premises or Coronavirus Job Retention Bonus Scheme and how they apply to your business, please contact us and a colleague will be happy to help you.