Is Job Support Scheme a ‘nightmare for accountants’?
Will the new Jobs Support Scheme be ‘another nightmare’ for the accountancy profession on top of a mountain of other recent legislative change?
It seems that quite a few accountants feel that way, judging by the recent article by AccountingWEB, which stated: “A large majority seemed dismayed at the Chancellor’s new plans, with comments condemning the scheme as “complete rubbish” and “yet another nightmare” for accountants.”
Rishi Sunak unveiled the successor to Furlough last week.
The new programme, apparently inspired by wage subsidy schemes used in countries like Germany will last six months from 1 November – after furlough ends.
It means helping to keep staff in their existing roles on reduced hours, to stave off the alternative of redundancy.
Is it yet another compliance headache?
For some accountants, they clearly feel it is. The good news is IRIS has launched a Job Support Scheme calculator.
This helps businesses find out how much they can claim back based on the Government’s scheme.
Simply input, your employees’ regular monthly gross wage, their regular monthly hours and the hours they will now be working.
The calculator will show the amount the employers will need to pay for the reduced hours worked and the Government contribution.
How will the scheme work?
The Government will pay a third of hours not worked up to a £697.92 monthly cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.
How do firms make a claim?
The Government will issue grant payments in arrears, reimbursing the employer for the Government’s contribution. The grant will not cover Class 1 employer NICs or pension contributions, although these will remain payable by the employer.
Firms will be able to make a claim online through Gov.uk from December 2020. They will be paid on a monthly basis.
Will accountants decide to outsource payroll?
With this extra complication of the new scheme and the fact its start date coincides with the onset of busy season, some accountants will be considering outsourcing the payroll work to a service such as IRIS Resourcing.
Geoff Glover, Tax Partner at The Buxton Partnership, has found it “cost-effective” and a catalyst for his practice to grow.
He says: “Ultimately IRIS Resourcing, has enabled us to bring on more customers, it’s been fundamental to where we have got to as a business because we know we can take the extra work on.”