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PHTM COVID-19 FINANCE UPDATE


BREAKING NEWS – NEWLOCKDOWN IN ENGLAND


FURLOUGH SCHEME EXTENDED


Boris Johnson has announced that the Coronavirus Job Retention Scheme will be extended rather than closed as originally planned. The extension will cover the new lockdown in England starting on Thursday 5 November and lasting until Wednesday 2 December.


The Coronavirus Job Retention Scheme (or furlough scheme) was originally planned to end on 31 October. The new Job Support Scheme (JSS) was set to launch on 1 November.


However, Boris Johnson has announced that the furlough scheme will be extended, having previously resisted calls for such an extension.


To avoid having two schemes running simultaneously, JSS has been delayed. JSS will now launch when the new furlough extension ends.


The furlough scheme has been extended for the month of November. The precise end date is unclear, but the English lockdown restrictions look set to be in place until 2 December. The government will pay up to 80% of an employee’s normal pay, capped at £2,500 and employers will be responsible for NICs and pension contributions.


SELF-EMPLOYED INCOME SUPPORT SCHEME


The Self-Employed grant is to increase from the previously announced level of 40% of trading profits to 80% for November 2020.


JOB SUPPORT SCHEME


The government’s new Job Support Scheme (JSS) was due to replace the furlough scheme and to start on 1 November 2020. This will now come in after lockdown restrictions have been eased.


This was first announced by the government in their Winter Economy Plan on 24 September but was further updated on 22 October.


It comprises two wage support schemes JSS Open and JSS Closed.


The scheme that relates to our industry is JSS Open as this supports businesses that can stay open but are facing lower demand.


JSS OPEN - Employers facing decreased demand:


Many employers can operate safely but continue to face reduced demand so they may need extra support over the winter to help keep their employees attached to their workforce.


For these employers, the Job Support Scheme, through JSS Open, will give employers the option of keeping their employees in a job on shorter hours rather than making them redundant.


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• The employee will need to work a minimum of 20% of their usual hours and the employer will continue to pay them as normal for the hours worked.


• Alongside this, the employee will receive 66.67% of their normal pay for the hours not worked - this will be made up of contributions from the employer and from the government.


• The employer will pay 5% of reference salary for the hours not worked, up to a maximum of £125 per month, with the discretion to pay more than this if they wish.


• The government will pay the remainder of 61.67%, of reference salary for the hours not worked, up to a maximum of £1,541.75 per month.


• This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.


WHO CAN CLAIM:


Neither the employer nor the employee needs to have benefitted from the Corona Virus Job Retention Scheme to be eligible for the Job Support Scheme. Employers will be able to access the Job Support Scheme if they have enrolled for PAYE online, if they have a UK, Channel Island or Isle of Man bank account


EMPLOYEES WHO CAN BE CLAIMED FOR:


Eligible employers will be able to claim the Job Support Scheme grant for employees who were on their PAYE payroll between 6 April 2019 and 11:59pm on 23 September 2020.


This means an RTI Full Payment Submission notifying payment in respect of that employee must have been made to HMRC at some point from 6 April 2019 up to 11:59pm 23 September 2020.


WORKING TAX CREDITS:


Employees whose hours reduce due to the COVID-19 pandemic will continue to have access to Working Tax Credit and its childcare element for the duration of the JSS scheme


EMPLOYEES WORKING REDUCED HOURS WHO CAN BE CLAIMED FOR


Eligible employers will be able to claim the JSS Open grant for employees who are working at least 20% of their usual hours.


Employees can do training in working hours while being claimed for under the Job Support Scheme. Hours that employees spend training are paid for by the employer at their full rate of pay and will count towards 20% of their usual hours.


NATIONAL MINIMUM WAGE:


Employees are entitled to the National Living Wage, National Minimum Wage or Apprentices Minimum Wage for the hours they are working or treated as working (such as training undertaken at the request of the employer in non-working hours) under minimum wage rules.


For JSS Open, at least minimum wage rates must be paid for all hours worked or treated as worked.


JSS OPEN TEMPORARY WORKING AGREEMENTS:


To be eligible for the grant, employers must have reached written agreement with their employee that they have been offered a temporary working agreement.


The agreement must be available for view by HMRC on request.


This temporary working agreement must cover at least seven consecutive days.


NOVEMBER 2020


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