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Job Support Scheme – the latest guidance

Following the Chancellor’s announcement about changes to the Job Support Scheme (JSS), detailed guidance has now been released. I have summarised the key points to take from the latest guidance to help support employers who are considering making a claim.

I will continue to update our blog as we get further announcements and continue to digest the substantial amount of detailed guidance now released.

Following the revisions announced to the scheme on 22 October, the scheme is now split between the JSS Open scheme and the JSS Closed scheme. Both schemes will run from 1 November 2020 until 30 April 2021, with a review in January to consider revising the qualifying conditions. If the business is large, they will qualify for the schemes only if they meet the requirements of the financial impact assessment. SMEs do not need to undertake a financial impact assessment but may be asked to confirm when making a claim that they are experiencing reduced business activity due to coronavirus.

JSS Open scheme

The JSS Open scheme is available to all employers who have been impacted by coronavirus. It provides a grant towards the employee’s non-working time wages of 61.67%, with the employer contribution to the non-working time wages being 5% and capped at £125 per month, per employee. The grant will now be capped at £1,541.75 per employee, per month.

The JSS Closed scheme

The JSS Closed scheme is restricted to businesses which have been forced to close by government – most likely to apply to those businesses within Tier 3 local lockdown areas. It provides a grant of 67% of an employee’s wage with no contribution required from the employer, capped at £2083.33 per employee, per month.

As with the Coronavirus Job Retention Scheme (CJRS), the definition of employee is widely drawn for JSS purposes. The JSS is therefore open to claims for:

  • Office holders (including company directors and secretaries)
  • Salaried members of Limited Liability Partnerships (LLPs)
  • Agency workers (including those employed by umbrella companies)
  • Limb (b) workers
  • Contingent workers in the public sector
  • Contractors with public sector engagements in scope of IR35 off-payroll working rules (IR35)
  • The employee must be working fewer hours than their usual hours for a period of at least 7 consecutive days
  • The employee must continue to work at least 20% of their usual hours
  • JSS Open temporary working arrangement covering at least 7 days
  • The employee must have been employed in the business, and included on an RTI submission to HMRC, between the 6 April 2019 and the 23 September 2020
  • The employee must not be made redundant or be on notice of redundancy during the claim period
  • Large businesses must meet the financial impact assessment and must not make any distributions to shareholders during the claim period i.e. pay dividends or enter share buyback arrangements

In principle an employer can claim under both schemes, for instance a retail business may have multiple shops and one may be closed because of the local restrictions in place, and another may remain open but with reduced demand. In such instances, an employer can make a claim under both schemes. However, it is not possible for a claim to be made under both schemes for the same employee on the same day, the employee will either be included on a JSS Open claim or a JSS Closed claim.

A large business is a business with 250 or more employees. Where the business is part of a group, the 250 threshold appears to look at the employees employed in each subsidiary company in the group.

  • The employee must be working fewer hours than their usual hours for a period of at least 7 consecutive days
  • The employee must continue to work at least 20% of their usual hours
  • JSS Open temporary working arrangement covering at least 7 days
  • The employee must have been employed in the business, and included on an RTI submission to HMRC, between the 6 April 2019 and the 23 September 2020
  • The employee must not be made redundant or be on notice of redundancy during the claim period
  • Large businesses must meet the financial impact assessment and must not make any distributions to shareholders during the claim period i.e. pay dividends or enter share buyback arrangements

The test differs depending on whether the business is VAT registered or not. In both circumstances, the test involves a look back over historic monthly turnover, to determine whether in the lead up to the scheme commencing, the turnover was below average for the business. Where the business is within a VAT group, the assessment looks at the VAT returns for the entire VAT group.

Charities are not required to undertake a financial impact assessment.

The grant is a wage only grant, meaning employers will still need to meet the entirety of the employment costs themselves – this will include any employer national insurance, apprenticeship levy and employer pension contributions on the entire amount paid to the employee (not just the proportion funded by the employer).

While not a final cost, the scheme is paid monthly in arrears, meaning employers need to fund the wage costs initially themselves, with claims only able to be made monthly in arrears and it will not be possible to make the first claim until 8 December. The latest guidance goes on to reinforce this point and says “you must not delay payment of wages to your employees until you have received your grant payment, doing so will make you ineligible to claim”.

Yes, you will need a JSS Open temporary working agreement in place. The written agreement must be in place before the temporary working arrangement commences. The employee must agree to the temporary working agreement, but you are not required to get a written response from them.

It depends on when they were let go. If the employee was let go on or before 23 September, they will not qualify for the JSS if re-hired.

If they were let go after the 23 September, they can be rehired and included on a JSS claim.

No, employees do not need to be included on the scheme for the entire duration, and employers can flex the hours worked, provided a minimum 20% of usual hours are worked. Employees can be placed on an agreement multiple times, but each separate instance must be for a minimum period of 7 consecutive days.

The JSS Open scheme does not have to prescribe a number of hours for the employee to work, but simply states that to be eligible for JSS Open the employee must work at least 20% of their usual hours. The guidance goes on to confirm that the minimum 20% of usual hours must be worked across a claim period.

The measurement of 20% across a claim period has the potential to unintentionally invalidate employers JSS Open claims. To illustrate this point, consider the below example:

An employee usually works 8 hours per day Monday to Friday, but is reduced to only working on Tuesdays under the JSS short-time working agreement, the employer is likely to think this is sufficient on the basis they have worked 20% of their working week.

However, as the scheme requires 20% of time to be worked over the claim period, the employee is unlikely to have worked for 20% of the time if the claim relates to a calendar month claim for November.

The working days for the employee in November are 21 days, but the employee will only work the 4 Tuesdays. 4 days / 21 days = 19% of the employee’s usual hours.

The guidance does go on to talk about disregarding some JSS Open claim days (https://www.gov.uk/guidance/extra-steps-to-take-before-calculating-your-claim-through-the-job-support-scheme-open#dis-usual) to help ensure the minimum 20% is met. This disregard wil help employers with severe reductions in employee working time achieve the minimum 20% working time commitment, but it will come at a cost of making the claim that bit harder to make. The guidance then goes on to stay that employers need to be consistent in using the disregard, without explaining what will be considered consistent. Employers in this position will want to keep additional records to ensure they can demonstrate they have been consistent in applying any disregard.

The JSS schemes are entirely distinct from the CJRS and neither the employer needs to have made a CJRS claim, nor the employee included on a CJRS claim as a pre-condition of making a JSS claim.

For the purposes of the JSS, employees undertaking non-core duties such as statutory duties of a director, count as working time.

Training can be done in both working and non-working time. If you pay the employee at their full rate for the time spent training, it will count towards the 20% working hours requirement.

If employees are instructed to undertake training in non-working time, consideration still needs to be given to whether NMW is required to be paid to them.

The guidance confirms that for the purposes of the JSS Open claim holiday taken can count as either working or non-working time. This means that the 20% minimum working time can be covered by holiday, when the employee is on a period of annual. This will be particularly relevant over the Christmas holiday period.

The guidance does however go on to confirm that employees cannot be included in a JSS claim purely because they intend to take a period of holiday.

Records need to be kept for 6 years and need to include information on:

  • The amount claimed and claim period
  • Any calculations you did (in case HMRC need more information about your claim)
  • Reference hours worked (JSS Open only)
  • Actual hours worked (JSS Open only)
  • Reference pay
  • The days covered for each pay period under the JSS temporary working agreement
  • The claim reference number given when a claim is made

Claims are made monthly in arrears, meaning the first claim will cover all pay periods ending on or before 30 November. Pay periods cannot be apportioned, so if a pay period spans the 30 November cut off, it will form part of the December claim instead.

The first day a claim can be made for the pay periods ending 30 November is 8 December. You’ll have 14 days to submit claims for pay periods ending in each month. You can only make one claim during this time and it needs to include all the pay periods that end in the month you are claiming for.

This means the latest date a claim for pay periods ending on or before 30 November, is the 22 December. This short claim window is likely to be put under more pressure for any business which will be breaking early for the Christmas break i.e. Friday 18 December, in this instance the employer will only have 10 days to make a claim.

Employees on annual payrolls can make a claim, provided the pay period ends while the scheme is open i.e. the pay period must end between 1 November and 30 April. The claim will cover the period from the start date of the short-term working until the end of the pay period. No claim will be possible for the balance relating to a new annual pay reference period.

For instance, if an employee with an annual pay period to 28 February was on short term work from 1 November, a JSS claim could be made for only the period between 1 November and 28 February. Even though the JSS runs to 30 April, as the new pay period will not end until after the scheme closes, no claim can be made for the 1 March to 30 April period.

The guidance does state within it’s examples relating to pay reference periods (https://www.gov.uk/government/publications/find-examples-to-help-you-calculate-your-employees-wages-for-the-job-support-scheme/example-of-how-to-work-out-your-claim-period) that those employers who are currently using an annual payroll, can consider moving to a weekly or monthly pay frequency throughout January, February, March and April so that they can claim through JSS Open for those months.

There are separate calculations depending whether the employee has fixed or varying hours.

For fixed hour employees, the following steps need to be taken to identify usual hours:

  1. Identifying the hours and repeating working pattern of the employee in the final pay period before both 19 March and 23 September.
  2. If the repeating work pattern for both the 19 March and 23 September pay periods are the same length, take the higher number of hours from the two pay periods for the next steps in the calculation. If it has changed, you need to perform the calculation with both pay periods and use the highest result as the usual hours of the employee.
  3. Divide the number of hours by the number of calendar days in the work pattern (i.e. include non-work days)
  4. Multiply the answer from step 3 by the number of days in the JSS claim period and round to the nearest whole number. This is then your usual hours

The calculations for employees whose hours vary is even more involved and I would recommend reviewing HMRC’s guidance and examples here (https://www.gov.uk/guidance/extra-steps-to-take-before-calculating-your-claim-through-the-job-support-scheme-open#usual-hours) to understand how this will work.) to understand how this will work.

The definition of normal pay for JSS purposes, follows the same definition we saw with the CJRS. It will include wages, salary, overtime and non-discretionary payments such as non-discretionary commissions. It will not include benefits in kind, or payments which are discretionary i.e. a non-contractual bonus.

As with the CJRS, any salary used will be taken post-salary sacrifice.

There appears to have been a fundamental shift in the scheme since the original announcement from the Chancellor. Previously, the monthly grant was capped at £697, meaning a higher paid employee with only a small reduction in working time could still get within the cap. The move in the latest guidance provides for a maximum reference salary of £37,500 and adopts an approach more akin to the CJRS, with daily and weekly caps https://www.gov.uk/guidance/calculate-how-much-you-can-claim-through-the-job-support-scheme on the grant available.

Should you have any questions on the JSS that I have not answered in this blog, please feel free to contact Steve Ashworth or myself and our employer solutions team.

FEATURING: Scott Campbell
Scott joined PKF Francis Clark in 2014, he is a chartered tax adviser and tax director in the employer solutions team. He specialises in all… read more
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