Employers guide to the new Coronavirus Job Support Scheme
Many business leaders welcomed the Chancellor’s recent statement where he spelled out the Government’s latest plans to support the economy through the coronavirus crisis. The headline announcement was a new Job Support Scheme that will follow the closure of the furlough scheme.
Rishi Sunak said that the new scheme would “support only viable jobs”. Some business leaders complained that it would not be enough to prevent widespread job losses, particularly in hard hit industries like hospitality and tourism.
To help employers make the most of the new scheme, we have answered some of your most important questions below.
How will the scheme work?
The employer will continue to pay employees for any time that they work, but the burden of hours not worked will be split between the employer and the Government and the employee (through a wage reduction).
For every hour not worked by the employee, both the Government and employer will pay a third each of the usual hourly wage for that employee. The Government contribution will be capped at £697.92 a month.
Employees must work at least 33% of their usual hours and will receive a minimum of 77% of their normal wage, unless it is above the Government cap.
When does the scheme start?
The scheme starts on the 1st of November and will last six months.
Will I still be able to claim the job retention bonus?
You should still be able to claim the one-off job retention bonus of £1,000 per qualifying employee if they are still employed at the end of January 2021. Make sure you read the Government guidelines carefully to see if your employees count.
Can I make employees redundant while claiming the grant?
No. Employees cannot be made redundant or put on notice of redundancy during the period their employer is claiming the grant.
How can I claim?
The scheme will open on 1 November, but employers will only be able to make a claim online from December 2020. Payments will be made on monthly basis and will only be payable in arrears, after payment to the employee has been made and reported to HMRC.
How will the scheme affect my business?
As your accountant, CloudAccountant.co.uk can help you calculate the costs and implications of using the new Coronavirus Job Support Scheme so that you can make more informed business decisions.
Did the Chancellor announce any additional support for businesses?
The Chancellor also announced a range of additional measures, mainly to support business cashflow.
- Cancellation of planned VAT increase in tourism and hospitality sectors. VAT will now rise from 5% to 20% at the end of March 2021.
- Business Bounce Back and Pay as you Grow loans will have repayment periods extended from 6 to 10 years. Some loans may be deferred for up to six months.
- Businesses that deferred VAT will be able to split payments into 11 monthly interest-free payments, saving a significant one off bill in 2021.
For more information or advice, speak to a member of the team today. Call: 0800 281 0303.