COVID-19 UKH Webinar Update on Job Support Scheme
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COVID-19
UKH Webinar
Update on Job Support Scheme
26 October 2020
1
Today’s speakers
John Harding Thea Morris
Partner Senior Associate
Employment Lead Employment
Update on Job Support Scheme 26 October 2020
PwC 2
Agenda
The Job Support Scheme based on information available at 22nd October 2020.
● Overview
● Eligibility and Conditions
● Claims Process
● What is Still to Come
● Questions
Update on Job Support Scheme 26 October 2020
PwC 3
Job Support Scheme Overview
Overview
Policy Timeline:
○ The first iteration of the Job Support Scheme (JSS) (now known as JSS Open) was first announced by the Chancellor on
24 September 2020.
○ On 9 October it was expanded for cases of local lockdown (now known as JSS Closed).
○ Substantial revisions to JSS Open were then announced on 22 October 2020.
● JSS is open from 1 November 2020 to 30 April 2021 but the Government will review the terms of the scheme in January.
● Neither the employer nor the employee needs to have previously used CJRS. However, JSS Open builds upon concepts in
CJRS including:
○ Reference Salary
○ Usual hours for both across fixed and variable employees
● The JSS comes in two parts:
○ JSS Open - for businesses able to continue to operate
○ JSS Closed - for businesses legally forced to close due to further restrictions
● NIC/pension contributions are not covered under JSS.
Update on Job Support Scheme 26 October 2020
PwC 5Overview
JSS Open:
● Worked hours - employees are required to work a min of 20% of their “usual hours” and are paid as normal for those hours.
● The usual hours not worked - will be 66.67% funded, split between:
○ 5% by the employer (max £125) and;
○ 61.67% by the Government (max cap of £1,541.75 per calendar month).
○ So employees get 2/3rds of normal pay for “usual hours” not worked.
● Ensures employees continue to receive at least 73.3% of their normal wages, where they earn £3,125 a month or less.
● Government’s 61.67% grant amount will need to be paid to the employee by the employer and then reclaimed.
JSS Closed:
● Each employee who cannot work will receive 66.67% of their normal pay.
● Fully funded by the Government (up to max cap of £2,083.33 per calendar month i.e. same capped salary of £3,125).
● Will need to be be paid by the employer and then reclaimed.
Note under both JSS Open and Closed, Employers can pay more than the minimum if they wish.
Update on Job Support Scheme 26 October 2020
PwC 6How does the new JSS scheme compare?
Minimum hours
Scraped JSS employee must work and
33% 22.2% 22.2% 22.2% paid by employer
Unworked hours paid by
employer
Worked hours Unworked hours
Unworked hours paid by
government
Unworked hours unpaid
JSS Open
20% 4% 49.3% 26.7%
Worked hours Unworked hours
JSS Closed 67% 33%
Update on Job Support Scheme 26 October 2020
PwC 7
Unworked hoursTimeline
20th 22nd
Deadline to notify JSS updates on
1st 8th Early January 31st
any CJRS over additional support for
claims made before The new Job Support Job Support Scheme Deadline for claims under JSS Deadline for Job
businesses: JSS Open
22 July to avoid and JSS Closed Scheme opens claim period opens for for November Retention Bonus claims
penalties November
2020 OCTOBER NOVEMBER DECEMBER 2021 JANUARY FEBRUARY MARCH APRIL
9th 31st 30th Late December 15th 30th
Job Support Scheme Coronavirus Job Final deadline for HMRC activity into CJRS First date for claims under The Job Support
expanded for businesses Retention Scheme claims under CJRS overclaims begins Job Retention Bonus Scheme ends
forced to close closes
Update on Job Support Scheme 26 October 2020
PwC 8Interaction with other schemes
Job Retention Bonus (JRB)
● Employers claiming JSS will also be eligible for the Job Retention Bonus.
● Grants under JSS can be used by employers to pay an employee’s wages and help meet the Lower Earnings Limit of the JRB.
Coronavirus Job Retention Scheme (CJRS)
● May be occasions where an employee’s pay period includes both eligible amounts to be claimed under the CJRS (period where
they were furloughed until 31 October 2020) and the JSS (from 1 November 2020).
● The amounts to be claimed from each of the schemes should be calculated separately, following the guidance for each scheme
which will take into account the number of days that fall within each of the scheme’s timelines.
● No amount of gross pay should be included in more than one scheme.
Job Support Schemes (JSS)
● Employers can claim JSS Open and JSS Closed grants at the same time for different employees.
● Employers cannot claim for the same employee under both JSS schemes for the same day.
Update on Job Support Scheme 26 October 2020
PwC 9Job Support Scheme Eligibility and conditions
Eligibility (applies to both JSS Open and JSS Closed)
Employers:
● Must have enrolled for PAYE online.
● Have a UK, Channel Island or Isle of Man bank account.
● Organisations that have staff costs that are fully publicly funded, should use that money to continue paying their staff, and not
use JSS. For organisations who are in receipt of public funds but are not fully publicly funded, the guidance indicates that
participation in JSS is possible but that they should contact their sponsor department or respective administration for guidance.
Employees:
● Must hold employment with the employer on 23 September 2020, included in an FPS between 6 April 19 and 23 September 20.
● Can claim if employee ceases employment after 23 September 2020 and is subsequently rehired
● Employee is anyone treated as such for Income Tax purposes.
● Cannot claim for employees made redundant or serving a contractual or statutory notice period during the claim period.
● Cannot enter into any commitment or transaction with the employee which would reduce wages below the amount claimed.
Update on Job Support Scheme 26 October 2020
PwC 11Eligibility (specific to each scheme)
JSS Open:
● Large employers (250 or more employees at 23 September 2020) need to undertake a Financial Impact Test.
● Small employers (less than 250 employees) will not have to satisfy this test.
● Employees working reduced hours must be working at least 20% of their usual hours.
● Employers must have a written “temporary working agreement” with their employees (see next slide).
JSS Closed:
● Employers have been legally required to close their premises as a direct result of coronavirus restrictions.
● Businesses premises required to close as a result of specific workplace outbreaks are not eligible for JSS Closed.
Update on Job Support Scheme 26 October 2020
PwC 12Temporary Working Agreements
JSS Open JSS Closed
• Employers must enter into written agreement with
employees that they will be working reduced hours • Employers must have reached written agreement with their
covering at least 7 consecutive days. employees that they have been instructed to and agree to
stop working for a minimum of 7 consecutive calendar days.
• Employers are only able to claim from the later of:
- the date the employee starts working reduced hours or • Agreements should be kept for 5 years.
- the date when working reduced hours is confirmed in • Agreement must be available to HMRC on request.
writing
• Agreements should be kept for 5 years.
• Need to keep other records including actual hours worked &
usual hours worked.
• Agreement must be available to HMRC on request.
26 October 2020
PwC 13Financial Turnover Test (large employers only)
Overview
● Large employers are required to show that they have been financially impacted by virtue of the Financial Turnover Test.
● This involves comparing turnover in box 6 of VAT returns from 2020 to the same period in 2019. If the employer’s turnover has
remained equal or has decreased compared to the previous year, then they will qualify.
● Raises questions on impact of “extraordinary items” in either quarters’ filings on eligibility to claim including changes in
composition of VAT group.
1 Quarterly VAT returns - Compare total sales figure on their VAT return, due to be filed between 31 August 2020 and 7 November 2020.
2 Monthly VAT returns - Compare the three consecutive months, due to be filed by 7 November 2020 with the same period in 2019.
Less frequent VAT returns - Compare the three consecutive months which are due to be filed by 7 November 2020 with the same
3 period in 2019; but will need to have submitted a VAT return between 31 August 2020 and 7 November 2020 to be eligible.
4 Groups - Large employers who are part of a VAT group will use the turnover figures for the VAT group for this calculation.
PwC 14JSS Closed - legal requirement to close
National Governments
● JSS Closed - for businesses legally required to close premises as a direct result from restrictions set by one or more of the 4 UK
Governments.
● This includes premises restricted to delivery or collection only services from their premises and those restricted to provision of food
and/ or drink outdoors.
● Only includes primary workplaces- still to be defined
● That the employer has instructed to and who cease work for a minimum period of at least 7 consecutive calendar days.
Local Public Health Authorities
● Businesses premises required to close by local public health authorities as a result of specific workplace outbreaks are not eligible
for this scheme.
Further guidance will be published by the end of October.
Update on Job Support Scheme 26 October 2020
PwC 15Capital distributions
● The Government expects that large employers (250 or more employees) and their corporate groups using the scheme will not
make capital distributions whilst claiming JSS. This includes:
○ dividends
○ charge
○ free or other distribution
○ any equivalent payment that a partnership may make to its partners
● Currently the Government does not plan to make this expectation a contractual or legal condition of the scheme.
● But encourages business to reflect on their responsibilities and that taxpayers should be able to rely on public money only
being claimed where it is clearly needed.
Update on Job Support Scheme 26 October 2020
PwC 16Naming / transparency
● Employees will be able to check if their employer has made a JSS claim relating to them via their Personal Tax Account (sign
up on GOV.UK).
● HMRC intend to publish names of employers who have used JSS.
● HMRC may also publish names of employers who are charged a penalty because of deliberately incorrect JSS grant claims.
● HMRC will check claims and;
○ withhold any payments where they suspect claim to be ineligible
○ any overclaim by an employer needs to be repaid to HMRC where claim contains incorrect information
○ The full amount of any grant is repayable if found to be fraudulent and
○ HMRC can charge penalties of up to 100% where appropriate
● Note given JSS builds on foundations of CJRS if you haven’t already done so now is a good time to have a CJRS health
check.
○
Update on Job Support Scheme 26 October 2020
PwC 17Claim Process
Claim process
● Claims will be made retrospectively, ie pay employees, then claim the JSS grant from HMRC.
● Able to claim from 8 December 2020, with payment made after “claim approved”.
● Government element based on Reference Salary - follows same definition as for CJRS in terms of what is included/excluded.
● Defined by reference to Fixed Pay employees and Variable Pay employees.
Fixed Pay employees - Reference Salary (note pay periods may now be of different lengths) is greater of:
○ wages payable in the last pay period ending on or before 23 September 2020 and;
○ wages payable in the last pay period ending on or before 19 March 2020 (could be same salary calculated under CJRS)
Variable Pay employees - Reference Salary is greater of
○ wages earned in the same calendar period in 19/20 tax year
○ average wages payable in the 19/20 tax year (note not to date of furlough so may be different figure than under CJRS)or;
○ average wages payable from 1 February 2020 to 23 September 2020
Claims will commence from the later of:
○ Date employee starts working reduced hours or
○ Date when working reduced hours is confirmed in writing (not when the decision is made)
Update on Job Support Scheme 26 October 2020
PwC 19Reference Salary - for JSS Open only
For JSS Open only, further guidance at the end of October will set out how to work out Reference Salary for JSS Closed.
Calculations to include:
Employees’ Reference Salary is made up of regular payments employers are obliged to make, including:
✓ regular wages
✓ non-discretionary payments for hours worked, including overtime
✓ non-discretionary fees
✓ non-discretionary commission payments
✓ piece rate payments
Calculations cannot include:
Payments made at the discretion of the employer or client, that they were not contractually obligated to pay, including:
⤬ any tips, including those distributed through troncs
⤬ discretionary bonuses
⤬ discretionary commission payments
⤬ non-cash payments
⤬ non-monetary benefits i.e. benefits in kind and salary sacrifice schemes (including pension contributions) that reduce an
employee's’ taxable pay
Update on Job Support Scheme 26 October 2020
PwC 20Next Steps What is still to come...
Next steps
What is missing / what can we expect to be published in the further guidance by the end of October 2020?
• Steps employers need to take to calculate and make a claim to the JSS
• Additional conditions for eligibility for JSS Closed
• More details on employee eligibility
• Further guidance for large employers who are not VAT registered
• How Extraordinary revenue items might need to be accounted for
• How 250 employees is counted for group companies and those with OS entities
• What to include in the Written Temporary Agreement
• How to work out reference salary for JSS Closed
• Full details of example calculations
• Government expect to introduce parental pay legislation
Update on Job Support Scheme 26 October 2020
PwC 22Summary
Summary
● JSS Open - for businesses able to continue to operate
● JSS Closed - for businesses legally forced to close due to further restrictions
● Further guidance due to be published by the end of this month on the Job Support Schemes
● Given that this builds on CJRS Employers who haven’t done so should have a health check review of their CJRS
claims before they extend the processes in to JSS for the next 6 months
Update on Job Support Scheme 26 October 2020
PwC 24Questions and for more information...
John Harding Thea Morris
Partner Senior Associate
Employment Lead Employment
+44 (0)7801 042 607 +44 (0)7710 036 936
john.l.harding@pwc.com thea.morris@pwc.com
Update on Job Support Scheme 26 October 2020
PwC 25Thank you pwc.com This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2020 PricewaterhouseCoopers LLP. All rights reserved. PwC refers to the UK member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.
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