Extra wage support announced for businesses shut down due to Covid restrictions
The Chancellor, Rishi Sunak, has announced an extension to the Job Support Scheme for businesses legally required to close due to coronavirus restrictions.
- Firms whose premises are legally required to shut as a direct result of local or national restrictions will receive grants to pay the wages of staff who cannot work. This includes premises restricted to delivery or collection only services from their premises
- Employees must be instructed to and cease work for a minimum of 7 consecutive days
- The government will pay 67% of the employee’s normal pay, capped at £2,100 per month. Further detail on how normal pay is calculated will be set out in guidance
- Payments will be taxable and employers will have to pay employer National Insurance Contributions and pension contributions in full
- Employers can top up employee pay if they wish
- Grants can only be used as reimbursement for wage costs actually incurred and payments will be made in arrears, reimbursing the employer for the government’s contribution
- Employers will be able to make a claim on a monthly basis online through gov.uk from December 2020
- Employers must agree the scheme with the relevant staff, make any changes to the employment contract by agreement and notify the employee in writing. This agreement must be made available to HMRC on request.
As this is part of the Job Support Scheme (announced a couple of weeks ago):
- Employers must have a UK bank account and a UK PAYE scheme registered on or before 23 September 2020
- Employees must have been on payroll on 23 September 2020, meaning a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020
- The scheme will begin on 1 November and will be available for six months. There will be a review in January 2021. From now until 31 October, firms that are legally required to close will have to use the the Coronavirus Job Retention Scheme
HMRC intends to publish the name of employers who have used the scheme and employees will be able to find out if their employer has claimed for them under the scheme. HMRC will continue to operate a hotline for individuals to make reports of any fraudulent claims they may be aware of.
Businesses required to close as a result of specific workplace outbreaks by local public health authorities are not eligible for this scheme.
The government will publish further guidance in the coming weeks.
In the meantime the government has published a factsheet, available here.
For further information on the Job Support Scheme, click here.
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