Expansion of the JSS to help firms required to close due to COVID Restrictions

Expansion of the JSS to help firms required to close due to COVID Restrictions

Caroline Harwood, Partner, Head of Share Plans and Employment Tax
09/10/2020
Expansion of the JSS to help firms required to close due to COVID Restrictions

There has been a great deal of political and commercial pressure on the Chancellor, Rishi Sunak, as commentators suggest that the package of measures in the Winter Economic Plan announced in September do not go far enough to support British businesses hit by the pandemic.

In response, on 9 October 2020 the Chancellor made two key announcements:

  • the Job Support Scheme (JSS) will be expanded to support businesses across the UK required to close their premises due to coronavirus restrictions, covering up to two thirds of employees' salaries over the coming months
  • cash grants for businesses required to close in local lockdowns will also be increased to up to £3,000 per month.

Which businesses are eligible?

  • The relevant business must be subject to COVID-related restrictions such that they are legally required to close their premises which includes being required to provide only delivery and collection services from their premises, or food and drink outdoors from their premises.
  • The employees subject to a claim must be off work for at least seven consecutive days.
  • The business can be located anywhere in the UK.
  • Businesses can claim under the expanded JSS regardless of whether they have previously made a claim under the Coronavirus Job Retention Scheme, or any other COVID-19 wages support scheme.

How does the JSS expansion work?

  • The government will pay two thirds of each employee’s salary (or 67%), up to a maximum of £2,100 a month.
  • Employers will not have to contribute anything towards those employee’s wage costs.
  • Employers will have to pay applicable National Insurance Contributions and pensions contributions.
  • Claims can only be made for employees employed and an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 23 September.

In line with the JSS as originally announced the expanded scheme will start on 1 November 2020 and last for six months with a review taking place in January 2021. Claims can be made online from December 2021 and payments will be made in arrears. 

Cash Grants

  • The government is now making this scheme more generous so that businesses receive up to £3,000 per month, rather than up to £1,500 per three weeks, and they are eligible for payment after only two weeks of closure rather than three.
  • Small businesses with a rateable value of or below £15,000 can now claim £1,300 per month; medium sized businesses with a rateable value between £15,000 and £51,000 can claim £2,000 per month; and larger businesses can claim £3,000.
  • The government is also extending the scheme to include businesses which have been forced to close on a national rather than a local basis.

Impact

While there are inevitable gaps in coverage, this package will provide essential support to businesses forced to close due to local lockdowns and so will be very welcome, especially in the hard hit hospitality sector.

For more information, please contact Caroline Harwood or your usual Crowe contact.

Contact us

Caroline Harwood
Caroline Harwood
Partner, Head of Share Plans and Employment Tax
London