Additional Government Support for businesses and new rules explained


We have seen the Government tighten restrictions as cases of COVID-19 are on the rise, with new laws and penalties, which apply to employers who prevent employees self-isolating when they are required to. We have also had confirmation that the furlough scheme is ending on 31 October and being replaced with a new job support scheme from 1 November for 6 months. In this article, our partner Nicky Gleadow at The HR Point gives more detail on these areas…

Other measures also in place are:

  • an extension to the Self-Employed Income Support Scheme (SEISS)
  • help for the hospitality and tourism sectors through a continuation of the reduction in VAT
  • support for over 1 million businesses to relieve pressure on their finances and cashflow through an extension to the application period for four government-backed loans schemes, and changes to the terms of repayment for Bounce Back Loans (BBLS) and Coronavirus Business Interruption Loans (CBILS)
  • new payment schemes to ease the burden of paying deferred VAT and Self-Assessment tax liabilities.

Penalties for non-compliance with self-isolation requirements
In and effort to ensure people do self-isolate the Government has done 2 things, one introduced a payment of up to £500 for those on low income who have to self-isolate to help support them financially.  Two – introduced fines for those who do not self-isolate when they should do so.

Why as an employer do you need to be aware of the fines?
Because under the new legislation it is an offence for an employer to knowingly permit a worker (including an agency worker) to attend any place other than where the individual is self-isolating.  This includes individuals who are required to self-isolate because they live with someone who has tested positive.  So, if an employer knows a worker has tested positive (or lives with someone who has tested positive), it is now responsible for stopping the worker from working (unless they can work from home).  Any employer who fails to do so will face a fine, starting at £1,000.

There is also an obligation on the worker to tell their employer that they are self-isolating (reg 8).  Any individual who breaches self-isolation will, normally, commit a separate criminal offence (reg 11).

The new job support scheme
We are waiting for fully guidance but what do we know so far

The Government’s Winter Plan states:
“To support viable UK employers who face lower demand due to COVID-19, and to keep their employees attached to the workforce, the government will be introducing a new Job Support Scheme from 1 November 2020. Employees will need to work a minimum of 33% of their usual hours. For every hour not worked the employer and the government will each pay one third of the employee’s usual pay, and the government contribution will be capped at £697.92 per month. Employees using the scheme will receive at least 77% of their pay, where the government contribution has not been capped. The employer will be reimbursed in arrears for the government contribution. The employee must not be on a redundancy notice. The scheme will run for six months from 1 November 2020 and is open to all employers with a UK bank account and a UK PAYE scheme. All Small and Medium-Sized Enterprises (SMEs) will be eligible; large businesses will be required to demonstrate that their business has been adversely affected by COVID-19, and the government expects that large employers will not be making capital distributions (such as dividends), while using the scheme.”

Government Factsheet
The Government has also published a factsheet –

Key points to be aware of are:

  • Changes will have to be agreed and put in writing
  • Employees can come on and off the scheme
  • Employers and employees do not have to have used or been furloughed previously
  • to be eligible, employees must have been on the employer’s Real Time Information submission on or before 23 September 2020 (here we go again)
  • the minimum 33% threshold hours for which an employee must work may be increased in months 4-6 of the scheme
  • working patterns can vary, but each short-time working arrangement must cover a minimum period of seven days
  • the government’s grant will not cover Class 1 employer NIC or pension contributions, although they remain payable by the employer
  • ‘usual wages’ will follow a “similar” methodology to the CJRS
  • Claims can be made from 1 December and will be paid monthly in arrears.
  • Claims can only be made after a pay period, so once the employee has been paid and the RTI submitted
  • Employees on the scheme can not be made redundant or on notice of redundancy while on the scheme

The scheme will be useful for employers who have a decline in business, anticipate that recovering and wish to keep their employees.  It will not be of use to business that are closed where there is no work for employees to do and no income to pay any portion of salary.  The Chancellor has acknowledged that not all jobs can be saved and this does mean some employers will find themselves needing to make redundancies, if this is the case for you we can help and support you through that process.

This is an example from the factsheet:
Beth normally works 5 days a week and earns £350 a week. Her company is suffering reduced sales due to coronavirus. Rather than making Beth redundant, the company puts Beth on the Job Support Scheme, working 2 days a week (40% of her usual hours).

  • Her employer pays Beth £140 for the days she works.
  • And for the time she is not working (3 days or 60%, worth £210), she will also earn 2/3, or £140, bringing her total earnings to £280, 80% of her normal wage.
  • The Government will give a grant worth £70 (1/3 of hours not worked, equivalent to 20% of her normal wages) to Beth’s employer to support them in keeping Beth’s job.

The Government factsheet also includes a table to give further examples:

Hours Employee Worked 33% 40% 50% 60% 70%
Hours Employee Not Working 67% 60% 50% 40% 30%
Employee Earnings (% of normal) 78% 80% 83% 87% 90%
Gov’t Grant (% of normal wages) 22% 20% 17% 13% 10%
Employer Cost (% normal wages) 55% 60% 67% 73% 80%

Don’t forget about our FREE service for Members with Nicky Gleadow of The HR Point –– please remember to use this if you need it!