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Winter economy plan: helping employers determine their next steps

The Chancellor has unveiled a further package of emergency employment measures as part of his winter economy plan to support businesses during the upcoming winter months.

Last updated: 9 October 2020

In this article, we outline the key points announced and discuss steps employers should be considering before the Coronavirus Job Retention Scheme (CJRS) comes to an end on the 31 October.

The Job Support Scheme

A new Job Support Scheme will be introduced from 1 November for six months to support viable UK employers who face lower demand due to COVID-19 and want to protect their employees from redundancy.

To be eligible for this scheme, employees must not already be on notice of redundancy and will need to work a minimum of 33% of their usual hours. Employers will pay the wages of employees for the hours they work, however, for every hour not worked, the employer and the government will each pay one third of the employee’s usual pay. The government contribution will be capped at £697.92 per month, and employees using the scheme will receive at least 77% of their pay, where the government contribution is not capped. 

The Job Support Scheme will be open to all small and medium-sized firms who have a UK bank account and a UK PAYE scheme, and will also apply to larger firms if their turnover is reduced. It’s available to businesses regardless of whether or not they have previously used the furlough scheme, and employers can benefit and make claims from both the Job Support Scheme and the Job Retention Bonus announced previously. For this scheme, the employer will be reimbursed in arrears for the government contribution. 

The self-employment grant

In addition to the schemes offered to employers to protect their employees, the Chancellor also announced continued support for self-employed individuals by extending the self-employment grant to April 2021.

The grant will be limited to self-employed individuals who are currently eligible for the present income support scheme, and are actively continuing to trade, but facing reduced demand due to COVID-19.

The extension will be in the form of two taxable grants:

  1. The first grant will cover a three-month period from 1 November to 31 January 2021, covering 20% of average monthly trading profits, capped at £1,875 in total. 
  2. The second grant will cover a three-month period from the start of February.

On 9 October, the Chancellor announced that where COVID-19 restrictions force UK firms to shut by law, employees will receive 67% of their pay paid for (up to a maximum of £2,100 a month) by the government. This further measure will commence on 1 November and will be reviewed in January. It applies UK wide and an RTI submission for each employee must have been made to HMRC on, or before 23 September 2020. More details of this scheme are expected to be announced shortly.

Protecting jobs and businesses clearly remains a key priority for the government, and more details on the support available is yet to be announced. In the meantime, employers across all sectors are encouraged to consider the following steps ahead of the CJRS coming to an end.

  • Will the jobs of furloughed employees exist in their present form? 
  • Is there a job for employees to return to?
  • Is the business still viable?  
  • What financial support is available?
  • What changes need to be made for the job to be viable? 

These are just some of the questions employers need to consider, and we are talking to a number of businesses about issues that have arisen as a result of COVID-19. If you have any queries related to HR matters in your organisation, please get in touch with our experts using the form below.

About the author

Doug Farrow

+44 (0)20 7556 1453
farrowd@buzzacott.co.uk

Last updated: 9 October 2020

In this article, we outline the key points announced and discuss steps employers should be considering before the Coronavirus Job Retention Scheme (CJRS) comes to an end on the 31 October.

The Job Support Scheme

A new Job Support Scheme will be introduced from 1 November for six months to support viable UK employers who face lower demand due to COVID-19 and want to protect their employees from redundancy.

To be eligible for this scheme, employees must not already be on notice of redundancy and will need to work a minimum of 33% of their usual hours. Employers will pay the wages of employees for the hours they work, however, for every hour not worked, the employer and the government will each pay one third of the employee’s usual pay. The government contribution will be capped at £697.92 per month, and employees using the scheme will receive at least 77% of their pay, where the government contribution is not capped. 

The Job Support Scheme will be open to all small and medium-sized firms who have a UK bank account and a UK PAYE scheme, and will also apply to larger firms if their turnover is reduced. It’s available to businesses regardless of whether or not they have previously used the furlough scheme, and employers can benefit and make claims from both the Job Support Scheme and the Job Retention Bonus announced previously. For this scheme, the employer will be reimbursed in arrears for the government contribution. 

The self-employment grant

In addition to the schemes offered to employers to protect their employees, the Chancellor also announced continued support for self-employed individuals by extending the self-employment grant to April 2021.

The grant will be limited to self-employed individuals who are currently eligible for the present income support scheme, and are actively continuing to trade, but facing reduced demand due to COVID-19.

The extension will be in the form of two taxable grants:

  1. The first grant will cover a three-month period from 1 November to 31 January 2021, covering 20% of average monthly trading profits, capped at £1,875 in total. 
  2. The second grant will cover a three-month period from the start of February.

On 9 October, the Chancellor announced that where COVID-19 restrictions force UK firms to shut by law, employees will receive 67% of their pay paid for (up to a maximum of £2,100 a month) by the government. This further measure will commence on 1 November and will be reviewed in January. It applies UK wide and an RTI submission for each employee must have been made to HMRC on, or before 23 September 2020. More details of this scheme are expected to be announced shortly.

Protecting jobs and businesses clearly remains a key priority for the government, and more details on the support available is yet to be announced. In the meantime, employers across all sectors are encouraged to consider the following steps ahead of the CJRS coming to an end.

  • Will the jobs of furloughed employees exist in their present form? 
  • Is there a job for employees to return to?
  • Is the business still viable?  
  • What financial support is available?
  • What changes need to be made for the job to be viable? 

These are just some of the questions employers need to consider, and we are talking to a number of businesses about issues that have arisen as a result of COVID-19. If you have any queries related to HR matters in your organisation, please get in touch with our experts using the form below.

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