The new Job Support Scheme is unveiled!
The Chancellor of the Exchequer, Rishi Sunak, has given a statement in the Commons today setting out the government's new measures for employment.
A new Job Support Scheme (JSS) will provide support to those employees with viable jobs. The rationale behind the JSS is to keep people working, even if this means on shorter hours than normal, rather than making them redundant. Under the scheme employees must work at least a third of their normal hours. For those remaining hours not worked, the government and the employer will pay a third each. This means that employees working 33% of their hours will receive at least 77% of their pay. The JSS will begin from 1 November and continue for 6 months.
Support will be targeted at the businesses which need it most, so all small and medium businesses will be eligible. Large companies will only be eligible if their turnover has fallen as a result of the pandemic.
In the meantime the government is introducing a "pay as you grow" scheme for businesses which took government guaranteed loans during the crisis. Loans will be able to be extended from six to ten years. Interest only payments will be available, and it will also be possible to suspend payments for up to 6 months if a business is experiencing particular difficulties.
The Self-Employment Income Support Scheme (SEISS) will be extended on "similar terms" to the new JSS.
For those in the hospitality and tourism sectors the decision has been taken to cancel the planned VAT increase from 5% to 20% (which was due to come into effect in January). VAT will remain in place at 5% for these sectors until 31 March 2021.
The details of the new JSS, and the extension to the SEISS have yet to be provided, but it will provide some reassurance to both employers and employees that, once the Coronavirus Job Retention Scheme (CJRS) ends in October, there is no cliff edge and support is available.
As soon as we guidance is published on the JSS we will provide you with a further update.