COVID-19: Job Support Scheme

On 24^th September Chancellor of the Exchequer, Rishi Sunak, unveiled the government's Winter Economy Plan to support businesses and protect jobs over the coming months. The chancellor announced the launch of the new Job Support Scheme, to replace the Furlough Scheme. It was due to run for 6 months from 1^st November, but has been postponed due to the extension of the Job Retention Scheme. The government will contribute towards the wages of employees who are working fewer than normal hours due to lower demand over the winter months because of coronavirus.

How it works

Employers will continue to pay staff for the hours they work, but the government and the employers will each pay one third of the equivalent wages for the hours not worked. This means that employees who can only work shorter hours due to less demand will still be paid two thirds of the hours they can't work. The scheme ensures employees will earn a minimum of 77% of their normal wages where the government contribution has not been capped.

Employees must be working at least 33% of their usual working hours in order to be eligible for the scheme. The employee's usual salary will be used to calculate the level of grant provided - the grant being capped at £697.92 per month.

The new Job Support Scheme will sit alongside the Job Retention Bonus and could equate to a value of over 60% of average wages of workers who have been furloughed and are kept on until the start of February 2021. The Job Support Scheme will be open to UK businesses even if they have not previously made use of the Job Retention Scheme. Further guidance around the new scheme will be released in the near future.

For more information about the Job Support Scheme, visit the HMRC website here.

Self Employment Income Support Scheme (SEISS) Extension

In addition to the new Job Support Scheme, HMRC has confirmed the extension of the Self Employment Income Support Scheme Grant (SEISS). For self-employed individuals eligible for SEISS and actively trading but facing reduced demand due to Covid-19, an initial taxable grant will be provided. The grant will cover 3 months' worth of profits between November to the end of January 2021. The initial lump sum is worth 20% of average monthly profits, up to a total of £1,875.

An additional second grant will be available to cover the period between February 2021 to the end of April 2021. This may be adjusted to respond to changing circumstances.

This article is for general information purposes. It is not addressed to any specific parties and does not constitute advice (legal or otherwise) to any person.