Job Support Scheme Extended

This week it was announced that an extension to the Job Support Scheme for businesses required to close entirely due to tighter local or national Covid restrictions. Under these proposals, the government will pay two-thirds of wages for businesses forced to close in the coming months. 

Here is a summary of what’s currently known:

Which businesses are covered? The extension will support any business that is required to close its premises. This includes premises restricted to delivery or collection only services from their premises.

All employers with a UK bank account and a UK PAYE scheme registered on or before 23 September 2020 can claim under the scheme. It is not sector specific (although in practice the restrictions are likely to disproportionately impact the hospitality sector) and it does not appear that larger employers will be required to demonstrate any particular level of financial impact before they can access the scheme.

The extension applies only to businesses that are legally required to close their premises as a direct result of local or national restrictions. It will not benefit any of the following businesses, which may also be significantly impacted:

    • Businesses that are legally able to stay open but whose trade is significantly affected by a local lockdown, such as suppliers to the hospitality sector.

    • Businesses that are able to stay open but experience very reduced demand (such as theatres or cinemas in areas not subject to a local lockdown).

    • Businesses that decide to shut because of the reduced demand or broader impact of Covid on (such as some cinemas).

    • Businesses required to close by local public health authorities as a result of specific workplace outbreaks.


Which employees can be claimed for? The employer can make a claim under the JSS extension for any employee who has been instructed to cease work because of the required closure. The employee  does not need to have been furloughed but a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020.

Employers will only be able to use the scheme for employees who cannot work (paid or unpaid) for that employer (suggesting that if you can transfer them to other work then you should do so rather than claiming under the scheme).

Employees must be instructed to and cease work for a minimum of seven consecutive days.

How does the extension relate to other schemes? The extension sits alongside the original Job Support Scheme and Job Retention Bonus. It will be available to employers for 6 months, from 1 November 2020.

What are the government and employer contributions? The government will pay 67% of employees’ normal wages, up to a maximum of £2,100 a month. Payments will be taxable, and employers will need to cover employer NICs and automatic enrolment pension contributions. Employers can top up employee pay if they wish but they do not have to.

Do staff need to agree? Yes. Employers must agree the new scheme with the relevant staff. Much like the original furlough scheme, you have to gain written agreement from the employee, which would on balance probably be forthcoming, if there was no alternative other than redundancy. 
How will the grant be paid? The scheme will pay a grant to the employer calculated on the number of eligible employees who have been instructed to and agree to cease work. Claims must not overlap and must be made monthly in arrears. Employers will be able to make a claim on a monthly basis online from December 2020. This will be reviewed in January 2021. HMRC will check claims and may withhold payments or request repayment if a claim is found to be fraudulent or based on incorrect information.

The factsheet says that HMRC intend to publish the names of employers who have used the scheme, and employees will be able to find out if their employer has claimed for them under the scheme. This is presumably a measure that is intended to reduce fraud.

Can we still use the Job Support Scheme when restrictions are lifted? Yes, when premises re-open, small and medium sized employers can still claim under the JSS when facing reduced demand.

Can we still apply for the Job Retention Bonus? Yes, provided eligibility criteria are met and employees were previously part of the Job Retention (i.e. furloughing) Scheme.

What about redundancies? Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee. However, it isn’t clear how this will impact affected businesses which are already in a redundancy consultation or which have already served notice of redundancy.