Covid-19: Chancellor announces Job Support Scheme

The government has been under increasing pressure to extend the Coronavirus Job Retention Scheme which is going to stop providing support to employers at the end of October.  With infection rates of Covid-19 on the rise and anticipation of continued disruption to the economy, the Chancellor has outlined new measures in order to try and support businesses and self-employed individuals.

Included within those new measures is the Job Support Scheme.  To be eligible, employees must work at least one third of their normal hours.  The employer pays the employee in full for the hours worked and then the government and the employer will jointly cover two thirds of the payment for the unworked hours.  This means that the employee will receive at least 77% of their normal pay.  However, unlike the furlough scheme, the government will only be contributing 22% of the wage bill and not 80%.

The scheme is available for small and medium employers but only for larger employers where turnover has fallen during the pandemic.  Importantly, the scheme is open to any employer, not just those who made use of the furlough scheme.

The scheme will be available for 6 months from November 2020 and may be used by employers who also take up the Job Retention Bonus.

The Self-Employment Income Support Scheme will be extended on similar terms to the Job Support Scheme. No further details were given during the Chancellor’s announcement but we expect further details to be published soon.

As part of the plans, the Chancellor also announced that the planned increase in VAT in the hospitality industry (from 5% to 20%) will be postponed until 21 March 2021. 

We expect further details of the new plans in the coming days and we will announce any further updates. In the meantime, our team is on hand to advise you with your employment law needs so please do get in touch if we can be of assistance.