On Thursday 22nd October, the Chancellor announced a further extension to the Job Support Scheme (JSS) and the level of government support available to businesses affected by Covid-19 restrictions.

As it stands, only businesses that have been ordered to close due to legal restrictions are allowed to claim up to two thirds of their employee’s unworked wages (JSS Closed). Under the new programme, which will run from 1 November for six months, businesses that continue to operate but have been affected due to decreased demand, will receive similar help (JSS Open).

From 8 December, claims can be made in arrears and businesses are not required to have used the Coronavirus Job Retention Scheme (CJRS) previously in order to benefit from the new programme. Further guidance on this is expected to be published at the end of this month.

Depending on whether a business is using JSS Open or JSS Closed, additional eligibility criteria will exist, however both are open to businesses who have enrolled for PAYE online and hold a UK, Channel Island or Isle of Man bank account. Businesses must have been included on an RTI submission between 6 April 2019 and by 11:59pm on 23 September 2020.

For larger businesses (a legal entity with 250 or more employees across all payrolls on 23 September 2020), a financial impact test to demonstrate that their income has been impacted due to Covid-19 will be required. The test will enable businesses to make a claim under JSS Open. Examples of the tests needed based on VAT returns are available in the policy paper. Information for non-VAT registered large businesses is yet to be released.

Employees originally had to work at least one-third of their regular hours (paid by the employer), with two-thirds of hours not worked split between the government and employer at one-third each. Under the revised scheme, the employer will contribute just 5% for the hours not worked and the government will pay the rest (61.67%), this is subject to a monthly cap of £1,541.75 on the government’s share. The employee will still receive two-thirds of their pay.

The percentage of regular hours an employee needs to work to be eligible has also been reduced, the employee must work at least 20% (originally 30%) of their usual hours for the first three months of the scheme. After the three months, the government will consider whether to increase the minimum hours threshold.

For more information on the Job Support Scheme, please read the policy paper that can be found here.

For more information and guidance on coronavirus support measures for businesses, employers and employees, visit the activpayroll latest news page.

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