Job Support Scheme for Closed Businesses

On 9 October 2020, Rishi Sunak announced an extended Job Support Scheme for Closed Businesses. The aim of the extended scheme is to pay wages at businesses which are required to close due to local or national Coronavirus restrictions. The assistance will be in the form of grants to help pay the wages of staff who cannot work due to the restrictions. If a business can open, then viable jobs will be supported via the Job Support Scheme For Open Businesses that was announced on 24 September 2020.

UPDATES

Updated guidance is released regularly and I will update this page as more details are announced.

This page was firstly published on 10 October 2020 and the last update was 10 October 2020.

The Job Support Scheme for Closed Businesses applies to businesses in any region or nation of the UK that are legally required to shut over the winter period due to Coronavirus. That includes those businesses that are required to provide delivery and collection services only from their premises, or only serve food and drink outdoors from their premises.

In England some businesses such as pubs and bars will be forced to close if the local area is in Local Alert Level Very High. Pubs and restaurants across much of central Scotland were forced to close at 6pm on Friday 9 October 2020 and will remain closed until Sunday 25 October 2020. Wales entered a fire break on Friday 23 October 2020 which means certain businesses and venues, including bars, restaurants and most shops must close.

The grant will pay two thirds of the normal pay of staff who cannot work, protecting jobs and enabling businesses to reopen quickly once restrictions are lifted.

The key information for the Job Support Scheme for Closed Businesses is as follows:

  • Employees must be employed and an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 23 September;
  • Employees must have been furloughed for a minimum of 7 consecutive days;
  • Employees will receive two thirds of their normal pay (67%) up to £2,100 a month, from their employer;
  • The Government will cover the cost of the employees’ pay;
  • The employer will only need to cover the cost of employer national insurance and pension contributions, a very small proporttion of overall employment costs;
  • The extended Job Support Scheme will open on 1 November 2020 for 6 months and a review will take place in January 2021; and
  • Payments will be made in arrears, via a HMRC claims service, that will be available in early December 2020.

If your business remains open you can access financial support through the Job Support Scheme For Open Businesses.

How Will The Job Support Scheme for Closed Businesses Work?

The Job Support Scheme for Closed Businesses will begin on Sunday 1 November and will be available for six months, though the Government says there will be a review point in January 2021.

If your businesses was forced to close before Sunday 1 November you will, where eligible, be able to utilise the existing Coronavirus Job Retention Scheme until 31 October 2020 and then transfer to this scheme on 1 November 2020.

It doesn’t matter whether the restrictions are local or national, and they can be imposed by the UK Parliament or the Welsh Assembly, Scottish Parliament or Northern Ireland Assembly.

You will be able to claim for two-thirds of each employee’s pay, up to £2,100 each month. You will have to pay the employee’s national insurance and pension contributions and can, if you want to, to up the pay to 100%.

Employees must be off work for a minimum of seven consecutive days in order for a claim to be eligible. So that mirrors how the Furlough Scheme operated from 1 July 2020 through to 31 October 2020.

To be eligible each employee must have been on your PAYE payroll on or before 23 September 2020. That’s the same cut off date as the Normal Job Support Scheme.

The HMRC claims service will be available from early December and payments will be made on a monthly basis.

What We Don’t Know Yet?

It’s not clear what happens if a business is partially hit by restrictions.

Not all businesses are eligible for the Job Support Scheme For Open Businesses and it’s not clear whether those same restrictions apply to the Job Support Scheme For Closed Businesses.

We don’t yet know how ‘normal’ pay will be calculated, but I am assuming for now it will be a similar calculation to that used for the Coronavirus Job Retention Scheme.

The initial announcement didn’t make it clear whether the employee must refrain from doing any work whilst on the scheme. With the furlough scheme employee’s could receive 80% of pay through the usual employer and accept a paid job with another employer, so they were claiming two wages which always seemed unfair to me. If your contract of employment does not all employees to work elsewhere without permission I recommend reminding your employees of that clause.

What’s Next?

This is very early days for this Job Support Scheme for Closed Businesses. The Government Guidance and Treasury Direction will follow this initial announcement and hopefully in the next week or so. What we know so far is outlined above and I will update this page as more details are announced.

If you have any questions please call me on 0114 360 0626 or simply email me at enquiries@kea-hr.co.uk.

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Job Support Scheme for Closed Businesses