The Job Retention Bonus and the Job Support Scheme (JSS) FAQ
Job Retention Scheme 2 (JRS2)
Reminder: You have until 30 November 2020 to submit all claims for the period 1 July to 31 October. HMRC will not accept any claims after this date.
Job Retention Bonus
Check your eligibility here.
Download your free Job Retention Bonus template here.
Who can claim?
- All employers who furloughed someone under scheme 1 (between 1st March 2020 and 30th June 2020) met the 3 week minimum furlough rule and made a claim.
- You can still make a claim if you decide to use the new Job Support Scheme (JSS).
- For those where TUPE has taken place there are allowances for this but you would have needed to have made a claim for those employees under a previous scheme.
What will you able to claim?
- £1,000 per employee who was furloughed and is still employed by you on 31st January 2021 and has not been served redundancy notice or any other form of notice to terminate their employment.
- Minimum income threshold must be met as follows:
- Employees must be paid at least £1,560 gross taxable pay throughout the months:
- 6th November to 5th December 2020
- 6th December to 5th January 2021
- 6th January to 5th February 2021
- Please note the employees must have received pay in each of the months to be eligible for you to claim the £1,000 even if the total is above £1,560.
When can you claim?
- You will be able to claim from 15th February 2021, although how you make the claim is yet to be published and isn’t expected until the end of January 2021, but will likely be online.
- You will have until 31st March 2021 to make your claim.
What can you do now?
- You can collate the employee data of who was furloughed and from when for the evidence records.
- You can record the amount of taxable pay they receive in each of the tax months as above and then check on 5th February they have received something each month and the total is at least £1,560.
- Armstrong Watson is designing a template for you to use to collate this information. If you are a client of the Armstrong Watson payroll service, a report at the end of each tax month will be provided (this will ensure any weekly paid staff can be checked) and you can enter the amounts of pay into the template for those you furloughed in readiness for the procedure to claim.
- Armstrong Watson will be able to submit the claims on behalf of clients.
For more information including FAQ and claim templates, click here.
Job Support Scheme (JSS)
The latest government fact sheet can be found here.
Who can utilise this scheme?
- All employers can use this scheme where it will protect “viable” jobs and businesses and your business is impacted by Covid-19. As yet, the definition of “viable” hasn’t surfaced, but one would assume it means jobs and businesses that will be around for the foreseeable future.
- “Large businesses” will need to undertake a financial assessment test. The information on this test hasn’t been published yet so it is unclear whether it will be based on turnover or something else that HMRC will be able to validate. Whether this definition will be the same for the new off payroll working rules (IR35) due to come into force in April 2021 - which is based on the Companies Act - or something else is yet to be confirmed. However, from a payroll perspective, when real time information was introduced and before that, online filing, it was based on the number of employees, so if this definition is used then large would be those with 250 or more employees but until HMRC publishes guidance we will need to wait and see. In addition, HMRC state they do not expect large employers who do qualify to be making any capital distributions such as dividend payments.
- The same rules regarding having a PAYE scheme in place and a UK bank account etc. as per previous schemes apply.
- Unlike JRS2 whereby you had to have furloughed and claimed for those employees in scheme 1, this scheme is starting from scratch and is designed for all eligible employers i.e. employees that haven’t been previously furloughed can be claimed for under the JSS.
- The goal posts have moved again for this scheme, and for employees to be eligible they must have appeared on a real time information (FPS) submission to HMRC on or before 23rd September 2020.
- The employee must work and be paid full pay for at least 33% of their usual hours. However, the government has reserved the right to review the 33% amount after 3 months, so could go down (unlikely) or up (more likely) after January.
- As with JRS2, employees can come in and out of the scheme with differing work patterns. You will also be required to agree any short-term working patterns in writing to the employee and will need to keep records for HMRC to inspect should they wish to. It doesn’t state for how long, but if the same as JRS1 and JRS2 then it will be five years.
How does it work?
We don’t yet have all the detail on how the calculations will be worked out but what we do know is:
- Employees must work at least 33% of their usual hours. Usual hours for JRS2 is either contractual hours e.g. 37.5 hours per week, which for a 31 day month equates to 167 usual hours and, where variable under JRS2, you refer back to 2019/20 period and take the higher of either the same period in 2019/20 or the average. The factsheet does state the JSS will follow similar methodology used for “usual wages” calculations for JRS2. This will probably also mean what can count as earnings will be similar too. However, one of the questions I have submitted is where under JRS 1 and 2 if holiday was taken and it was on a furlough day you could claim, will this still apply to non-worked hours? I think there is a typo in the fact sheet as it says employers cannot top up, and believe it should say they can top up above two thirds.
- On the basis the employee works a minimum of 33% of usual hours, so for a fixed contractual hours person working 37.5 hours per week, my understanding, based on the above would be 167 x 33% = 55.11 minimum hours. The remainder (I have rounded for ease) 167 less 55 = 112 non- worked hours.
- The employer must then pay a third of the non-worked hours, with no upper pay cap, the government will then pay a third but up to a cap of £697.92 per month, and finally the employee contributes a third (by not receiving payment for a third). All income tax, National Insurance, pension etc. must be deducted as per normal payroll processing, including employer contributions on all monies.
- Please do note that an employee must not be on any form of notice to terminate their employment during the scheme where a claim is made.
How do you make a claim?
- The factsheet is somewhat lacking in this area. It does state it is open from 1st November to 30th April 2021 and you will make the claim online. Also grants will be paid in arrears so unlike the JRS2 where you can make a claim up to 14 days in advance of the employees being paid, this will not be permitted under the JSS.
As Armstrong Watson did for JRS1 and JRS2, we will be designing a template that will allow for data to be recorded and the calculations worked out for you. However, as with JRS2 you will need to enter certain data. For clients who use the Armstrong Watson payroll service, we will also be looking at what information we can produce to assist with the data entry part of the template.
Once the full calculation examples are published, we will work quickly to get the templates (monthly and weekly) on our website. As you can only submit one claim per month rather than in weekly frequencies as you can for JRS2, we are also working on a template that will allow employers to transfer weekly frequency data onto a claim template.