What does the updated Job Support Scheme mean for payroll processing?
If there’s one thing I’ve learned in life, it’s that kicking up a stink does get you places (just ask my partner). This has been proven yet again as, due to the rising rancour and frustration from tier 2 areas in the UK, the Chancellor Rishi Sunak has recently unveiled increased support for jobs and employees affected by COIVD-19 restrictions. These changes have a significant impact on those processing payroll and we want to clear up some of the confusion.
The announcement made on 31st October in line with the second lockdown means that businesses can receive Job Retention Scheme grants covering 80% of wages throughout November and the JSS implementation has been delayed to 1st December. The employer must pay for all the employer’s NIC and employer’s minimum workplace pension contributions on those wages and the grant will be for time not worked, up to £2,500 per month.
What does the update mean for Payroll professionals?
HMRC guidance states that under the revised scheme, employers will pay less and staff can work fewer hours before they qualify, while the government subsidiary has been doubled. This will be extremely welcome news for businesses who have not been forced to shut their doors, but whose trading will still be severely affected by the local lockdown rules but not liable for extra support.
Now, instead of a minimum requirement of having to pay 55% of employees’ wages for a third of hours, as announced last month, employers will now have to pay for a minimum of 20% of usual hours worked and 5% of hours not worked. The government will now foot 62% of the wages for hours not worked which more than doubles the maximum payment to £1,541.75. In the most generous of cases, the government will now go from funding 22% of wages to just under half.
Which Businesses qualify?
As before, the Job Support Scheme will be open to all small businesses and to larger businesses that can prove that their revenue has been impacted due to restrictions. The self employment scheme has also been doubled from 20% to 40% of profits, with a maximum grant now of £3,750 a month.
As well as this, the Chancellor also announced further help for the hard hit sectors of hospitality and leisure in tier 2 areas. English councils will be funded to give monthly grants of up to £2,100 to 150,000 hotels, restaurants and B&Bs.
So finally some good news but as always, we say thanks through gritted teeth. On the one hand, it is clear that the government is now acknowledging the severity of the situation businesses are finding themselves in through no fault of their own, but on the other hand is it too little too late again? But hey, for now I will bite my tongue and accept the handout as it’s better than a kick in the teeth!
Get the details right
During COVID-19, BrightPay have been running regular webinars to keep accountants up to date with the latest changes and the impact on payroll processing, don’t miss the latest webinar.
Free Webinar: New Job Support Scheme Explained and how to safeguard your payroll against COVID-19
18th November – 10.30am
In this webinar, we look at what you need to know about the extended Furlough scheme and new Job Support Scheme, including which employees are eligible, the level of government funding, and how the scheme is actioned through payroll. We will also share top tips for bureaux to ensure COVID-19 does not slow down payroll processing. Plus we will explore the rise in redundancies and the new changes regarding statutory redundancy and notice pay for furloughed employees.
What you'll learn:
- What the extended CJRS means for your business
- Everything you need to know about the Job Support Scheme
- Which employers and employees are eligible
- Tips for safeguarding your payroll
- How BrightPay’s Job Support Scheme Calculator & Claim Report works
- How to calculate notice pay and redundancy pay for furloughed employees
- Top tips to ensure COVID-19 does not slow down payroll processing
Writtten by Aoibheann Byrne
BrightPay Payroll Software