End of the Furlough Scheme (31st October) Start of the Job Support Scheme (1st November)
The Furlough Scheme ends 31st October
As you probably know, the last month for the Furlough Scheme is October. Claims for October need to be submitted to HMRC no later than 30/11/20. You can read more about the scheme here.
The Job Support Scheme starts 1st November
The next scheme, that might be of some assistance to you is called the Job Support Scheme. The scheme is designed to protect jobs in businesses that are facing lower demand due to Covid-19. The scheme works by topping up the wages of staff that are employed on a part-time basis.
The scheme opens 1/11/20 and is expected to run for 6 months. The Government is due to publish more detailed guidance shortly. For now, what follows is all we know.
How the Job Support Scheme works
Under this scheme:
- the company pays the employee for the time worked
- the cost of hours not worked is split: 1/3rd employer, 1/3rd employee and 1/3rd Government
- the Government’s contribution is capped at £697.92/month
- the Government’s contribution does not cover Class 1 National Insurance or pension contributions
- the company pays the Government’s portion to the employee and then claims it back from HMRC
Who is eligible for the Job Support Scheme
Eligibility requirements for the scheme are that the:
- employer must have a UK bank account and be registered for PAYE
- employee must have been included in an RTI PAYE submission made on or before 23 September 2020
- employee must work at least 33% of their usual hours for the first three months of the scheme
Worked example of the Job Support Scheme
I have paraphrased the following example from the Government’s guidance.
Example: John – days cut to 2 days a week because of COVID
John normally works 5 days a week and earns £350 a week. Because of reduced sales due to coronavirus his company agrees with him that he will work part-time, for 2 days a week. This amounts to 40% of his usual hours. John agrees to this because the alternative is that he will be made redundant.
- Gross pay paid by employer for days worked: £350×40% = £140/week
- Gross pay paid by employer for days not worked: £35060%÷3 = £70/week Total gross pay paid by employer: £210/week
- Gross pay paid by Government for days not worked: £35060%÷3 = £70/week
- John’s total gross pay: £280/week
Note that the company may also need to pay Class 1 National Insurance (usually at 13.8% on the gross pay that is more than £169/week (£962/month). So employer’s National Insurance for John is about £15/week (£280 – £169 x 13.8%).
Assistance
We will, of course, be pleased to help you apply for the Job Support Scheme. Please call a member of the team if you need more information.
The Job Support Scheme aims to protect jobs by topping up the wages of staff that are employed on a part-time basis.