The Coronavirus Job Retention Scheme (CJRS) will now 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 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.
HMRC will publish details of employers who make claims under the extended CJRS scheme, starting from December.
Will the scheme operate in the same way as previously?
- The extended scheme will work in the same way, with businesses being paid upfront to cover the wage costs of employees;
- There will be a short period in which the government will change the legal terms of the scheme and update the system and businesses will be paid in arrears for this period; and
- There will be no gap in eligibility of support between the previously announced end-date of CJRS on 31 October 2020 and this extension starting 1 November 2020.
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;
- Employers will still be able to top up employee wages above the scheme grant at their own expense; and
- The CJRS extension will be reviewed in January to examine whether the economic circumstances are improving enough for employers to be asked to increase contributions.
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.
How to calculate a claim
For employees previously eligible
The existing CJRS calculation of 80% of usual wages and of usual hours will apply to all employees who were eligible under CJRS, even if a claim was not made in respect of that employee under CJRS to 31 October 2020.
For employees not previously furloughed
For employees that meet the eligibility criteria of this extended scheme, but were not previously eligible for CJRS, the alternative calculations of reference pay and usual hours must be used.
Full details of this calculation guidance will be published on 10 November 2020.
How to make a claim
Claims can be made from 8am Wednesday 11 November, they can be made:
- In respect of an employee for a minimum 7 day claim window;
- In advance; and
- In arrears for the period from 1 November 2020 to 11 November 2020, from the week commencing 9 November 2020.
Additional points on making a claim
- The extended CJRS will operate as the previous scheme did, with businesses being able to claim either shortly before, during or after running payroll;
- Claims made for November must be submitted to HMRC by no-later than 14 December 2020;
- The closing date for claims up to and including 31 October remains 30 November 2020;
- Claims relating to each subsequent month should be submitted by day 14 of the following month;
- The claim period must start and end within the same calendar month;
- If the pay period includes days in more than one month each of those claims will need to be calculated separately;
- Employers must report and claim for a minimum period of 7 consecutive calendar days; and
- Employers will need to report actual hours worked and the usual hours an employee would be expected to work in a 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.