To offer further and additional support to viable UK employers who face lower demand due to COVID-19, and to help retain their employees, the government will be introducing a new Job Support Scheme from 1 November 2020. Employees must work a minimum of 33% of their usual hours. For each hour that the employee does not work the employer and the government will each pay one third of the employee’s usual pay, and the government contribution will be capped at £697.92 per month. Employees using the scheme will therefore receive at least 77% of their pay, where the government contribution has not been capped.
The employer will pay the employee for both their and the government’s contribution and be reimbursed in arrears for the government contribution.
It is important to note that the employee must not be on a redundancy notice, so it is a genuine ‘job retention scheme’. The scheme will run for six months from 1 November 2020 and is open to all employers with a UK bank account and a UK PAYE scheme. All Small and Medium-Sized Enterprises (SMEs) will be eligible; large businesses will be required to demonstrate that their business has been adversely affected by COVID-19, and the government expects that large employers will not be making capital distributions (such as dividends), while using the scheme.
Some key points:-