HMRC’s two-lane approach to supporting job retention this winter

As the country is returned to lockdown, the Chancellor has announce an extension to the Coronavirus Job Retention Scheme. You can find full details on

On 22nd October, HMRC released their policy paper covering the new-look Job Support Scheme that was originally announced in Chancellor Rishi Sunak’s Winter Economy Plan on 24th September.
The JSS starts on 1st November 2020 and runs for six months, until 30th April 2021. Employers and their PAYE agents will be able to make the first claim on 8th December.

We look at the highlights of the two-lane approach.

JSS Open: Employers facing decreased demand

If a business remains open this winter but faces decreased demand, the JSS Open scheme will provide support to help retain employees on reduces hours.

This is a larger support offer than originally announced, in light of the evolving pandemic situation and increased pressures on employers.

HMRC’s policy paper states:

“The employee will need to work a minimum of 20% of their usual hours and the employer will continue to pay them as normal for the hours worked. Alongside this, the employee will receive 66.67% of their normal pay for the hours not worked – this will be made up of contributions from the employer and from the government. The employer will pay 5% of reference salary for the hours not worked, up to a maximum of £125 per month, with the discretion to pay more than this if they wish. The government will pay the remainder of 61.67%, of reference salary for the hours not worked, up to a maximum of £1,541.75 per month. This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.”

As a basic example, consider Barney who usually works 100 hours a month at £10 per hour. His reference salary is therefore £1,000 per month.

His current hours worked is 20 and he earns £200.

Of the 80 hours not worked, worth £800:

  • HMRC pays 61.67%: £493.36
  • His employer pays 5%: £40.00

Barney receives £733.36, or 73.34% of his reference salary.

JSS Closed: Employers who are legally required to close their premises

Local lockdowns mean that some businesses are unable to open their premises to trade due to Coronavirus restrictions. For these employers, the government will support the wage costs of their employees unable to work due to closure. Employers may only claim for periods during which they are closed due to the relevant Coronavirus restrictions. Claims cannot be made for periods after restrictions have listed and the business premises are legally allowed to reopen. At that point, the employer may be eligible to claim under JSS Open.

JSS Closed is fully funded by the government. The employer will pay their employee two thirds of their normal pay and claim the money back, to a maximum of £2,083.33 per month.

Key facts about the two types of support

  • Claims will be made in arrears. The employer will pay the employee and claim the payment back from the relevant Job Support Scheme.
  • The JSS grant will not cover NICs or pension contributions. National Insurance Contributions and pension contributions remain payable by the employer.
  • The JSS runs for six months. The scheme is due to open on 1st November 2020 and end on 30th April 2021. The government will review the scheme in January.
  • You can claim for JSS Open and JSS Closed concurrently – but not for the same employee. For example, your physical premises have been required to close, but your back office staff can work from home. You will be able to claim for different employees on the scheme appropriate for each. However, you cannot claim for a single employee under both schemes at the same time.
  • Key employment dates. The JSS will be available for employees who were on the employer’s payroll between 6th April 2019 and 11:59pm on 23rd September 2020. An RTI Full Payment Submission must have been made to HMRC within that period.
  • Defining an employee. For the purposes of this scheme, an individual is an employee if they are treated as an employee for Income Tax purposes.

The Policy Paper

The full policy paper is available on and provides more detail and information on how JSS Open and Closed will work.

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