Employers will cover at least 55% of wages under new Jobs Support Scheme


Chancellor Rishi Sunak has unveiled the furlough scheme’s replacement: The Jobs Support scheme. Addressing the Commons, Sunak told listeners that there had been “no harder decision” than to end the furlough scheme, which had “supported millions of jobs through a period of acute crisis”. The decision to move to the new Jobs Support scheme was a result of the government’s belief that it was “fundamentally wrong to hold people in jobs that only exist within the furlough” while the economy was continuing to reopen. In contrast, the Jobs Support scheme will “create new opportunities and allow the economy to move forwards” through the creation of “viable” jobs that provide “genuine” security.

Sunak described the new scheme as being right for Britain today. He said that many businesses were operating safely and successfully, but were faced with reduced demand as a result of the coronavirus pandemic. He added that these businesses need support to bring as many people back to work as possible. As a result, the Jobs Support scheme will see the government directly support the wages of people in work, letting businesses that are struggling retain their staff – albeit, on reduced hours.

The scheme works like this: employees must work a minimum of 33% of their normal hours, which their employer will pay for normally. Then, the government and the employer will each pay a third of the employee’s outstanding wages. In other words, employees will receive 77% of their normal pay in exchange for working 33% of their normal hours. This is a worst-case example – employees kept on for more than 33% of their normal working hours will, of course, receive more than 77% of their normal pay. Under this same scenario, the total amount of normal wages an employer will be expected to contribute to each employee is 55%.

The scheme will run for six months from 1st November 2020, and is open to all businesses, regardless of whether or not they used the furlough scheme.

In addition to the Jobs Support scheme, Sunak said that more than one million businesses which borrowed under the government’s Bounce Back Loan scheme will be offered more time and flexibility to make repayments. He also added that the 15% VAT cut for the tourism and hospitality sectors would be extended until the end of March, and that businesses which deferred their VAT will no longer have to make a lump sum payment but now have the option of splitting it into smaller, interest free, payments over the course of 12 months.

If you’re an employer looking to make the most of the government’s new Jobs Support scheme, speak to our experienced accountants. Call us on 0121 456 0190, and find out how we can help your business use all the support it is entitled to.


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