The Coronavirus Job Retention Scheme (CJRS) will remain open until at least the end of March, providing businesses with increased certainty over the coming months.
Employees will continue to receive 80% of their salary for hours not worked, up to a maximum of £2,500. The terms of the scheme will be reviewed in January.
The Job Support Scheme, which was due to come into effect on 1 November 2020, has now been postponed until the furlough scheme comes to an end.
Are all employers eligible?
- All employers with a UK bank account and UK PAYE scheme can claim the grant; and
- The government expects that publicly funded organisations will not use the scheme, as has already been the case for CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted.
Are all employees eligible?
- To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 on 30 October 2020;
- This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made between 20 March and 30 October 2020; and
- Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees; and
- Employees do not need to have been furloughed under the CJRS previously.
How much will employers contribute?
- Employers will be asked to cover National Insurance and employer pension contributions;
- They will pay their employees for the time worked and the government grant for the time not worked; and
- Employers will still be able to top up employee wages above the scheme grant at their own expense.
How much will the government contribute?
- For claims between 1 November 2020 and 31 January 2021, the government will cover the cost of 80% of the salary of every eligible employee, up to a maximum government grant of £2,500 per month per employee for the time the employee spends on furlough; and
- The grant must be paid to the employee in full.
As the CJRS is being extended, the Job Retention Bonus will not be paid in February, the government will announce another retention incentive at the appropriate time.
How will the furlough operate?
- Businesses will have the flexibility to bring furloughed employees back to work on a part-time basis or furlough them full-time;
- Employees can vary the hours worked, in agreement with the employee;
- Employers will be able to claim the grant for the hours their employees are not working;
- When claiming for furloughed employees, employers will need to report and claim for a minimum period of seven consecutive days; and
- Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
Publishing employers’ information
From February, HMRC will publish the names, an indication of the value of claims and Company Registration Numbers of employers that have made claims that cover periods from December onwards.
These details will then continue to be published on a monthly basis.
Employees will also be able to check if their employer has made a CJRS claim on their behalf through their online Personal Tax Account from February.
How to calculate a claim
Before calculating a claim, the following need to be decided:
- The length of the claim period;
- What should be included when calculating wages; and
- Employees’ usual and furloughed hours.
Claim periods are made up of the days the grant is being claimed for. The start date of the first claim period is when the first employee was furloughed.
Claim periods must start and end with the same calendar month and last at least seven days, unless the claim includes either the first or last day of the calendar month.
For employees that were already on furlough in October and that are paid a fixed salary, the same usual wage calculations should be made.
The amount that should be used when calculating 80% of employees’ wages for hours not worked, is made up of the regular payments you are obliged to make. Further details can be found here.
Employees’ usual and furloughed hours
There is no requirement to calculate usual and furloughed hours for fully furloughed employees.
For flexibly furloughed employees, the usual hours, actual hours and furloughed hours should all be recorded for each claim period. There are different calculations for usual hours, depending on whether the employee works fixed or variable hours. Further details can be found here.
Employees taking leave whilst flexibly furloughed
Claims cannot be made under the scheme for any time an employee is on unpaid leave or statutory sick pay related leave.
Claims can be made for an employee who is on:
- Annual leave;
- Leave taken on account of time worked under a flexible work time arrangement;
- Family related statutory leave; and
- Reduced rate paid leave following a period of family related statutory leave.
How to make a claim
There are now monthly deadlines for making a claim, meaning that claims may need to be submitted earlier than in previous months. Click here for the list of monthly deadlines. Claims can be made before, during or after payroll is processed.
To make a claim you will need the Government Gateway ID and password received when you registered for PAYE online.
Claiming for employees that are flexibly furloughed
When submitting a claim for a flexibly furlough employee, you will need:
- The number of usual hours the employee would usually work in the claim period;
- The number of hours the employee has or will work in the claim period; and
- To maintain a record of the number of furloughed hours the employee has been furloughed in the claim period.
We appreciate this is a challenging time for many businesses and the guidance and support available is changing on a regular basis. We will continue to keep our news pages up-to-date with the latest information and guidance, however should you have any queries do get in touch with your usual M+A Partners contact or email firstname.lastname@example.org and we will be happy to help.