Friday, 16th October 2020, updated 22nd October 2020
We are pleased to announce our COVID 19: Payroll Update! This will impact on many employers and employees up and down the country. Particularly for businesses that will be directly impacted by the new 3 Tier Coronavirus Restrictions.
KEY POINTS
- The end of the current CJRS scheme
- Job Retention Bonus
- The NEW Job Support Scheme (JSS)
- Expansion of the Job Support Scheme
- The KICKSTART Scheme
At Onyx we have the expertise and experience to support all businesses through difficult times. Along with our Payroll Update our Payroll Team are on hand to offer the assistance needed. Maintaining a channel of communication means that we are at the end of the phone or only an e-mail away when you need us the most.
Contact us NOW to find out how we can help you.
Payroll Update: The End of the Current CJRS Scheme
The current Job Retention Scheme, The Flexible Furlough Scheme, will come to an end on 31st October 2020.
For this month, from 1st October, HMRC will pay 60% of the usual wages up to a cap of £1,875 per month for the hours furloughed employees do not work.
Employers will need to continue to pay their furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. They will need to fund the difference between this and the CJRS grant.
Employers must also continue to pay their furloughed employees’ National Insurance and pension contributions. There is no government support for this.
This scheme closes on 31st October and any final claims must be made on or before 30th November. Claims cannot be made or submitted after this date.
Payroll Update: Job Retention Bonus
The Government have set out a new scheme called the Job Retention Scheme. This is to help reduce mass redundancies and to support employers who keep their staff on the payroll.
This will pay out £1,000 for each employee who had originally been furloughed, and who have continued in the same employment that they had originally been furloughed.
The payment will be made directly to the employer. It does not need to be paid to the employee. It is to help provide additional support to the employers for continuing to keep their employees on.
There are restrictions. To be eligible, employees must earn at least £1,560 between 6th November 2020 and 5th February 2021 and have received earnings in the November, December, and January tax months. Employees must also not be serving a contractual or statutory notice period on 31st January 2021.
Claims for the bonus will be available from 15th February until 31st March, provided that the submissions have been made for PAYE information for the period up to 5th February 2021.
Payroll Update: The New Job Support Scheme (JSS) – Updated 22nd October 2020
This is the new scheme which is in effect an extension to the existing scheme. It will be introduced from 1st November 2020 and will run for 6 months.
The government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand.
Employers will continue to pay the wages for the hours their staff work. Employees are expected to work at least 20% of their usual hours. This ensures that employees who are only working for 1 day a week will still qualify. HMRC will review the minimum expected hours to be worked after 3 months of the scheme coming into effect.
For the hours not worked, employers will pay 5% of the usual wages (up to a cap of £125 per month) and the government will pay up to 61.67% of the usual wages (capped at £1,541.75 per month). The expectation is that employers will not be in a position to fund the remaining third and therefore this will be unpaid. However employers can top up employee’s wages above the 5% contribution at their own discretion.
Employers must pay for all the National Insurance contributions and statutory pension contributions.
This means that employees will receive at least two thirds of their usual wages for the hours not worked and 100% of the wages for the hours they do work. This will represent approximately 73% of their wages, where their usual wages do not exceed the monthly reference salary of £3,125.
The first claims can be made in December and grants will be paid on a monthly basis.
Eligible employers must have a UK bank account and a UK PAYE scheme. Neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme. However eligible employees must have been on the payroll on or before 23rd September 2020.
Large businesses will have to meet a financial assessment test, so the scheme is only available to those whose turnover is lower now than before experiencing difficulties from Covid-19. There will be no financial assessment test for small and medium enterprises (SMEs).
Employers must agree the temporary working arrangement for shorter hours in writing with their employees (or union).
The scheme will operate in addition to the Job Retention Bonus.
Payroll Update: Expansion of Job Support Scheme
The government has also announced an expansion of the JSS, to provide temporary support to businesses whose premises have been legally required to close as a direct result of coronavirus restrictions.
Under this expansion, affected businesses will receive grants towards the wages of employees who have been instructed to and cease work. This will cover businesses that, as a result of restrictions set by one or more of the four governments of the UK, are legally required to close their premises, or to provide only delivery and collection services from their premises.
The government will pay two thirds of employees’ usual wages, up to a maximum of £2,100 per month. Employers will not be required to contribute towards wages, but do need to cover employer National Insurance and pension contributions.
Employers can apply for the assistance under the new expansion of the JSS even if they have not previously used the Coronavirus Job Retention Scheme. The scheme will be reviewed in January.
HMRC has advised that they will release further information as necessary over the coming weeks. This will depend on how the new 3 Tier measures impact on local businesses as this will highlight where the help is needed most and for how long.
Payroll Update: The KICKSTART Scheme
In September the government announced a £1.2m scheme to help young people into work.
The 6 month placements are open to those aged 16-24 who are claiming Universal Credit and at risk of long term unemployment. These placements will be available across a range of different sectors in England, Scotland and Wales. It is anticipated that the first placements will be available from November.
There will also be extra funding to support young people to build their experience and help them move into sustained employment after they have completed their Kickstart funded job.
Employers will receive funding for 100% of the relevant National Minimum Wage for 25 hours a week, plus associated employer National Insurance contributions and employer minimum auto-enrolment pension contributions.
You can read our full article here >>> https://onyx.accountants/covid/kickstart-scheme/
Do you need any help?
Onyx has been processing furlough claims since the scheme began and our team of experts are on hand to assist with all your payroll queries and concerns.
As businesses start the process of returning to a new way of operating, there is so much to manage and with the usual seasonal festivities fast approaching, payroll, furlough claims and job retention bonus considerations are perhaps the last things that any business wants to be burdened with.
Why not give us a call and let us take the pressure off for a while. Our in-house payroll department can take-over all payroll processing, including pension calculations, HMRC submissions along with the background paperwork ready for the end of year.
Do you feel that unemployment is the only answer?
This will be inevitable for some employers and we would not want you to go through this decision alone.
Our HR partners are on hand to go though your options and we can help put you in touch with the HR Team who will assist with the utmost of sensitivity during what must already be a very difficult time for both you as an employer and for your valued staff.
Contact us now to find out more.
GET IN TOUCH WITH ONYX
Need help with your payroll or calculating the flexible furlough rates for your part-time staff? Not sure if you can claim the Job Retention Bonus or the NEW Job Support Scheme?
Contact us now or e-mail us at enquiries@onyxaccountants.co.uk for a FREE no obligation consultation.
Got any questions or queries? Our friendly team of tax specialists are happy to help. Just drop us a line! Call us on 0121 753 5522 or 01902 759 800.
Keep up to date with the latest announcements by visiting our dedicated page https://onyx.accountants/covid/
