The new Job Support Scheme begins on November 1 – here's everything car dealers need to know as furlough ends

3:19 pm, October 30, 2020

Very few people knew of the word ‘furlough’ before March, but since then it has become a word that many workers and employers have lived by.

The Furlough scheme – or, to give its proper title, the Coronavirus Job Retention Scheme (CJRS) – was put in place to help people who couldn’t do their jobs because of the pandemic, and to prevent mass job redundancies during lockdown.

The scheme was tweaked in June and began to unwind from August, with employers forced to take on more responsibilities such as paying employees’ National Insurance payments and topping up salaries at an increasing scale as the government support was cut back.

Furlough comes ends on October 31 bringing the curtain down on arguably the largest government support scheme the country has ever seen. In August, the scheme was estimated to have cost £34.7bn.

What’s happening now?

From November 1, the Coronavirus Job Retention Scheme (CJRS, or Furlough scheme) will be replaced by the Job Support Scheme (JSS).

JSS was announced on September 24 and has been designed to provide support to all business owners and companies – including car dealers – impacted by the ongoing pandemic so they can get the right level of assistance.

Since then, the scheme has been tweaked as the pandemic picture has changed.

But, correct as of October 29, details of the JSS are collated below, detailed with the assistance of accountancy firm MHA MacIntyre Hudson, motor trade legal specialists Lawgistics and the government’s own JJS hub page here.

How does JSS work?

We’ll try and keep this as straightforward as possible.

Like CJRS, JSS is designed to keep staff in work on shorter hours rather than making them redundant.

There are two main types of JSS – ‘JSS Open’ and ‘JSS Closed’ and these relate to dealers with business affected by different Tier levels – we explain this further on.

The scheme starts on Sunday and runs for six months to April 30, 2021 and it’ll be reviewed in January.

Dealers will be able to claim in arrears from December 8, 2020, with payments made after the claim has been approved, and employee will have to agree in writing to work reduced hours.

Lawgistics has a template that’s free to download for that – click here.

Lastly, it’s important to note JSS will not cover National Insurance or pension contributions – these remain payable by the dealer.

What is JSS Open?

JSS Open applies to dealers operating, but potentially facing or experiencing reduced demand in all Tiers in England, Scotland, Wales and Northern Ireland.

Under JSS Open…

Dealership staff and employees will need to work a minimum of 20 per cent of their usual hours and the employer will continue to pay them as normal for the hours worked
The employee will receive 66.67 per cent of their normal salary for the hours not worked, by:
– The dealer paying five per cent of reference salary for the hours not worked, up to a maximum of £125 per month. They can pay more than this if they want, and…
– The government paying the remainder of 61.67 per cent, of reference salary for the hours not worked, up to a maximum of £1,541.75 per month

All of this means the dealership employees will continue to receive at least 73 per cent of their normal wages, where they earn £3,125 a month or less.

What is JSS Closed?

JSS Closed affects dealers in Tier 3 in England, Tier 4 in Scotland and the Welsh Firebreak.

Those affected dealers that have to close their businesses by law as a direct result of coronavirus restrictions set out by one or more of the four UK governments.

Under JSS Closed…

An employee qualifies for JSS Closed where their primary workplace is at the premises that have been legally required to close as a direct result of coronavirus restrictions set by one or more of the UK governments, and…
The dealer has instructed the employee to stop working for a minimum period of seven consecutive
calendar days
A dealership employee who cannot work because of the coronavirus restrictions will receive 2/3rds of their normal pay. This will be paid by the dealer and fully funded by the government, to a maximum of £2,083.33 per month. Like JSS Closed, the dealer can pay more if they want to
Dealers are eligible for JSS Closed if their business premises at one or more locations has been legally required to close because of the restrictions – and this includes business premises restricted to delivery or collection-only services
A dealer with 250 or more employees on September 23, 2020 has to undertake a Financial
Impact Test demonstrating their turnover has remained equal or fallen to show they have been
adversely affected due to coronavirus
A dealer with less than 250 employees on September 23, 2020 is not required to satisfy the test
Some, or all, of the dealer employees need to be working reduced hours – employees must still be working for at least 20 per cent of their usual hours

Is every dealer covered under JSS Closed?

No. Dealers who have been told to close their businesses by local public health authorities as a result of workplace Covid-19 outbreaks are NOT eligible.

How long does JSS Closed cover dealers?

Once restrictions have lifted in the area the dealer operates in and they’re able to legally reopen, JSS Closed will no longer cover the dealer.

I’m a large dealer – what do I do?

To qualify for the JSS, large dealers (defined as dealers with 250 or more employees on September 23, 2020) need to complete a FIT – a Financial Impact Test. This is to show how your income has been impacted due to coronavirus.

Where can I get a FIT test?

The government has set up a hub page detailing everything you need to do, including instruction on how to complete a Financial Impact Test.

Can I apply for both JSS Open and JSS Closed?

You cannot apply for both for a single employee for the same day, and nor can you claim the grants at the same time for different employees.

Can I apply for an employee who I have made redundant?

No, you can’t, and nor can you for an employee who is servicing contractural or statutory notice period during the claim period.

Which employees are eligible?

Employees who are on any type of contract, including those on temporary or zero hours contracts
Those who were on PAYE payroll and on an RTi submission between April 6, 2019 and 11:59am on September 23, 2020
Employees who ceased employment after September 23, 2020 and were then rehired