HMRC issue guidance on the enhanced Coronavirus Job Support Scheme (JSS)

HMRC issue guidance on the enhanced Coronavirus Job..

Employers who plan to participate in the JSS should study its detail prior to its anticipated introduction in December.

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The JSS will support businesses which experience lower demand due to the COVID-19 outbreak, or whose premises are required to close or restrict their activities due to local lockdowns. It will pay grants toward the salary costs of employees who agree to work reduced hours, or who are prevented from working by government regulations. In addition to the basic qualifying requirements, special conditions apply to businesses with 250 or more employees. Claims may be made monthly in arrears. Employers should assess whether the financial support and flexibility offered by JSS – where relevant in conjunction with the Job Retention Bonus – are suitable for them and their workforce. Eligible employers who wish to participate will need to take certain formal steps to access the scheme. This article sets out our initial comments on HMRC’s new JSS guidance published on 30 October 2020, prior to the announcement that the Coronavirus Job Retention Scheme (CJRS) would be extended until December. Further commentary may be published in due course, as the position remains fluid.

Overview of the JSS

The scheme is expected to run from December 2020 and falls into two parts:

  • JSS Open (for employees who reduce their working hours by up to 80 percent due to lower demand); and
  • JSS Closed (for employees who cannot work due to their primary workplace closing or limiting its activities under central or devolved government restrictions).

Eligible employees can move between JSS Open and JSS Closed as circumstances change.

The JSS replaces the Coronavirus Job Retention Scheme (CJRS), but employers and employees do not need to have used the CJRS in order to participate. Receiving JSS funding will not prevent eligible employees claiming a Job Retention Bonus (JRB).

Eligible employers must pay participating employees their contractual rate for the hours they work under JSS Open, but can claim grants toward the direct salary costs of non-working time under both parts of the scheme. Employees must receive certain minimum payments for their non-working time which employers may, but are not obliged to, top up. These minimum payments, and the associated JSS grant funding, are summarised in the table below.

JSS Open non-working time JSS Closed non-working time

Employee min. payment

Grant funded

Employer funded

Employee min. payment

Grant funded

Employer funded

66.67% of ‘reference salary’ up to £1,666.75 per month

61.67% of ‘reference salary’ up to £1,541.75 per month

5% of ‘reference salary’ up to £125 per month

2/3 of ‘reference salary’ up to £2,083.33 per month

2/3 of ‘reference salary’ up to £2,083.33 per month


The employer must fund the employer’s NIC on payments made to employees, as well as the cost of any other benefits it has agreed to provide (such as pension contributions or benefits in kind).

Which employers are eligible?

The JSS is open to employers that operate a UK PAYE scheme registered on or before 23 September 2020, are enrolled for PAYE Online, and have a UK, Channel Islands or Isle of Man bank account.

However, organisations whose staff costs are wholly met by public funds should not participate.  Employers whose staff costs are partially publicly funded may be able to access the JSS and should approach their sponsoring department or administration for guidance.

In order to be eligible for JSS Open, ‘large employers’ other than charities must also demonstrate their turnover has not increased over the past 12 months. Broadly, this must be done by reference to VAT returns or, for non-VAT registered businesses, self-assessment tax returns.

For these purposes, ‘large employers’ are those which had 250 or more employees across all their PAYE schemes on 23 September 2020. This test is applied on a stand-alone entity, rather than a group, basis.

To qualify for JSS Closed, the relevant business premises must be legally required to close entirely, or to reduce its activities to delivery or collection only services or to serving food and drink outdoors. This must be as a direct result of restrictions imposed by either the Northern Irish, Scottish, UK or Welsh Government. Premises closures due to an incident of Coronavirus at that premises, restrictions imposed by a different authority (e.g. a local authority), or a curfew do not qualify for JSS Closed.

The UK Government does not expect large employers and their groups to pay dividends or make other distributions whilst funded under either part of the JSS. HMRC have confirmed that this is not a contractual or legal requirement of the scheme.  Instead, the Government expects large businesses to consider whether it would be appropriate to claim JSS funding if their financial position allows them to pay dividends.

HMRC intend to publish the names of employers who use the JSS and employees will be able to check whether their employer has made a claim for them via their HMRC personal tax account.

Which employees can participate?

Individuals are eligible for the JSS if they were included on a Real Time Information (RTI) submission filed with HMRC between 6 April 2019 and 23 September 2020. This applies to all employees (regardless of whether their contract of employment is full-time, part-time, flexible, zero hours, fixed term, or an apprenticeship contract) and certain other individuals who are treated as employees for tax purposes.

To participate in JSS Open, an employee must work at least 20 percent of their ‘usual hours’ over each claim period. To participate in JSS Closed, an employee must be unable to work because the workplace (or workplaces) at which they would ordinarily be expected to spend at least 60 percent of their working time is affected by relevant health protection restrictions.

Employees cannot carry out any work for their employer during their non working hours which makes money for, or provides services to the employer (or a linked or associated organisation).

As the JSS is intended to support viable jobs, claims cannot be made in respect of employees serving a notice period.

Practical issues

The employer and employee must enter into a written temporary working agreement before the relevant claim period begins. HMRC have said they will issue a template agreement before 6 November.

Each temporary working agreement must be made for a period of at least seven consecutive days. The employer and employee can enter into more than one agreement over the duration of the JSS and can agree to extend an existing agreement. Agreements can be put in place in advance of the announcement of any public health restrictions. For employees on JSS Open, the agreement does not need to specify the number of hours worked.

Normal employment law principles apply, including contractual requirements, anti-discrimination and consultation legislation. Employees who participate in the JSS retain their existing employment rights and continuity of employment.

Broadly, the JSS determines ‘reference salary’ and ‘usual hours’ on a similar basis to the CJRS. However, there are important differences in the methodology and new calculations are likely to be required for employees who were furloughed under the CJRS now participating in the JSS.

Each claim period is based on the pay periods that end in a calendar month. Claims will be filed monthly in arrears after the relevant salary costs being claimed have been paid to the employee and reported to HMRC through RTI.

Claims must be filed in a 14-day window in the following calendar month.

What should employers do now?

HMRC’s new guidance clarifies several points relating to the JSS.

Employers, especially those who concluded the JSS as originally announced on 24 September was not appropriate for them, should move quickly to assess how JSS Open and JSS Closed might support their operations.  This will include assessing:

  • Their expected workforce requirements until the end of April 2021;
  • The possibility of business premises being subject to local lockdown restrictions, at different times and for different periods, and potentially on more than one occasion; and
  • Whether the financial support and flexibility offered by JSS Open and JSS Closed, where relevant in conjunction with the JRB, are suitable for their business.

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