28 Sep, 2020 10:45 AM
Admin Category: Payroll,

Furlough Replacement: How Is Furlough Changing?

Rishi Sunak has officially announced the replacement of the Furlough Scheme.

The Chancellor, Rishi Sunak has made an announcement on Thursday which states what happens after the furlough scheme expires at the end of this October.

In his announcement, he confirmed a Job Support Scheme(JSS) will be forthcoming. Sunak is also looking at options which include a salary top-up scheme that is similar to those already operating in France and Germany. He is considering various forms of wage subsidy and will announce more financial help. The chancellor tweeted regarding the updates which states that - he will update the House of Commons on their plans to continue protecting jobs throughout the winter. 

In today’s blog Taj Accountants have come up with the details regarding the replacement of the Furlough Scheme - the Job Support Scheme (JSS).

What Is the Job Support Scheme (JSS)?

The Job Support Scheme (JSS) is a replacement of the previously running Furlough Scheme which is known as the Coronavirus Job Retention Scheme (CJRS).  

The Job Support Scheme (JSS) is built on three principles:

  1. The scheme will support viable jobs to make sure that employees must work 1/3 of their normal hours, and accordingly be paid for that work normally by their employer.
  2. It will target to support businesses who need it the most. All small and medium sized businesses are eligible, but larger businesses with their turnover fallen through the crisis will also be eligible. 
  3. The scheme will be open to employers across the UK, even if they previously had not been under the furlough scheme. 

Why Has the Job Support Scheme (JSS) Been Announced?

As the previous Furlough Scheme ends on 31 October 2020, employers will no longer be able to furlough their employees and pay the percentage of wages based on the guideline of the scheme. 

Even as the scheme is about to end but the COVID-19 crisis does not follow the lead towards the end, the Chancellor has decided to continue helping those businesses that need support to bring people back to work and protect as many viable jobs as he can through the new scheme. 

Therefore, the Job Support Scheme (JSS) has been announced to replace the previous Furlough Scheme which ends on 31 October 2020 in order to protect businesses from sinking. 

When Does the Job Support Scheme (JSS) Start?

The Job Support Scheme (JSS) will start from 1 November and will run for six months. 

Who Will Benefit From the Scheme?

The scheme aims to benefit small and medium-sized businesses throughout the UK. Large businesses can also get benefited from the scheme if they can prove their revenue has fallen because of the coronavirus crisis.

To be eligible for the scheme, employees have to work for at least one-third of their normal hours. Also, employees must have been on their company’s payroll since at least 23 September (each of the working arrangements must cover at least 7 days). 

Furthermore, the scheme benefits full-time, part-time, flexible, zero-hour and agency workers if they were on their employer's PAYE payroll on 19 March 2020.

How Does the Job Support Scheme (JSS) Work?

The scheme will top up salaries in companies which can't take employees back full-time. For those hours not worked, the government and employer will each pay one-third of the remaining wages, so the employee would get at least 77% of their pay.

The payment will be based on an employee's normal salary, with the government contribution capped at £697.92 per month. 

How Does the Job Support Scheme (JSS) Differ From the Previous Scheme?

This new scheme is almost the same as the Coronavirus Grant of 80% of Wages and Salaries offered under the furlough scheme. However, the employees now have to work at least a third of their hours, instead of none.

Also, previously the government paid 80% of workers' wages under the Furlough Scheme, but in case of the new scheme - it will pay a maximum of 22%.

Other Job Help on Offer

To help with the ongoing unemployment issue, the UK government will also give businesses:

  • £1,000 for every furloughed employee who were kept on until at least the end of January,
  • £1,500 for all the out-of-work 16-24 year old given a ''high quality'' six-month work placement, and
  • £2,000 for every under 25 apprentice taken on until the end of January, or £1,500 for above 25s. 

The government will directly support the wages of people in work and will give businesses the option of keeping employees in a job on shorter hours (rather than making them redundant) who face depressed demand. 

Final Thoughts 

The scheme may continue to have changes, after three months, the government may increase the minimum number of hours worked.

As your reliable Small Business Accountants in London, Taj Accountants will keep you updated with all the upcoming changes and guidance. 

Finally, it is to be kept in mind that the workers cannot be made redundant or put on notice while a Jobs Support Scheme (JSS) grant is being claimed on their behalf.

How Can Taj Accountants Assist You?

At Taj Accountants, our team of experts aim to keep you updated with all the ongoing financial news. Check our other blogs to learn more about other schemes and financial help. We also offer a wide range of accounting and taxation advice to corporates, as well as individuals. We aim to provide you a range of accountancy services along with tax services and advice, accounting services, payroll, tax return, accounts for self-employed and accounts for limited companies to clients throughout London. 

Relevant Links:



DISCLAIMER: The purpose of the blog is to provide information and insight regarding the situation. The readers must contact experts before making any decisions based on the information. We highly appreciate you to contact Taj Accountants for further assistance.

Whatsapp Now