With the closure of the Coronavirus Job Retention Scheme (furlough) at the end of October, businesses will no longer be able to claim wage subsidy through the furlough program, with the final claim for the October period needing to be made by the 30th November deadline.
From the 1st November 2020, the newly extended Job Support Scheme will come into action to provide further financial relief to businesses in an attempt to protect jobs, particularly through the difficult winter months.
The scheme will open on the 1st of November and run for an initial 6-month period, through to April 2021.
For businesses, the scheme will be in place to help cover the wages of employees who are not able to work their full-time normal hours. The breakdown for businesses who are facing decreased demand will be as follows:
- Employees must work a minimum of 20% of their usual hours
- The company will pay the full wages for normal hours worked per employee.
- The hours not worked will be covered jointly between the company and the job support scheme.
- The employer will cover 5% of the wages for hours not worked to a maximum of £125 per month.
- The government will then contribute an additional 61.67% of reference salary for the hours not worked, up to a maximum of £1,541.75 per month
- This means that the employee will continue to receive at least 73% of their normal wages, providing they earn equal to or less than £3,125 per month.
For businesses who have been forced to legally close their premises, they will be eligible to claim two-thirds of their normal pay up to a maximum of £2,083.33 per month from the government. Anything on top of that will be at the discretion of the employer, for example, if they wish to make up the other 3rd of the salary. This means that any employee affected by the forced lockdown closure can still receive a minimum of 2/3rds of their normal salary, providing they meet the eligibility criteria.
For all businesses with a UK bank account and a UK PAYE scheme, they will be eligible to make a claim for the relief.
Employees can be claimed for as part of the scheme if they meet the additional criteria set out below:
- The employee was on the PAYE payroll between 6th April 2019 and 23rd September 2020.
- An RTI full payment submission notifying payment in respect of that employee must have been made to HMRC at some point from 6th April 2019 and 23rd September 2020.
Businesses DO NOT need to have taken part in the Coronavirus Job Retention Scheme to be eligible as this is a completely separate program.
As with everything at the moment, we will continue to update you as and when the Government releases new information. This round of funding for businesses is relevant as of the 22nd of October 2020.