With the commencement of the second Coronavirus lockdown in England as of 5th November 2020, the government has decided to extend the Coronavirus Job Retention Scheme (CJRS) from 31 October 2020 to 31 March 2021; with claims made between November 2020 and January 2021 to be more generous for employers than it was in October.
Here's what you need to know about the extended CJRS:
- The government will pay 80% of wage costs for hours furloughed employees do not work, up to a cap of £2,500, proportional to the hours not worked, from 1 November 2020 to January 2021.
- Employers will still need to pay all National Insurance Contributions (NICs) and pension contributions, however employers will have flexibility to decide whether employees are to work on a part-time basis (whilst on flexi-furlough), or whether to furlough employees full-time.
- The government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more, and we will keep you updated of any developments.
Who is eligible for the extended Coronavirus Job Retention Scheme (CJRS)?
One noticeable change in the extension is that neither the employer/employee needs to have used the CJRS previously to be eligible. You can claim for employees who were on your PAYE payroll on 30 October 2020, and for which a PAYE Real Time Information (RTI) submission has been made to HMRC between 20 March and 30 October.
If employees were on your payroll on 23 September (i.e. notified to HMRC by way of a RTI submission on or before 23 September) and have since been made redundant or stopped working for you, then they will also qualify for the scheme if you re-employ them.
One notable point of the extended CJRS is that for employees who were previously eligible under the CJRS scheme, regardless of whether a claim was made for that employee prior to 31 October 2020, you will still calculate the 80% wage costs as per the original scheme. Whilst for employees who meet the criteria of the extended scheme, but were not previously eligible, you are to use an alternative calculation for reference pay and usual hours to take account of updated reference periods.
CJRS: Employers should bear in mind
As what appears to be a deterrent, HMRC will publish details of employers who make claims under the extended CJRS scheme from December. It is also worth noting that the government has restated that employers must:
- Make sure that the furlough agreement is consistent with employment, equality and discrimination laws;
- Keep a written record of the furlough agreement for 5 years; and
- Keep records of how many hours their employees work and the number of hours they are furloughed for 6 years.
An update on other Covid schemes and bonuses
The Job Support Scheme, which was due to commence on 1 November has now been postponed, assumingly until the CJRS comes to an end, however we are awaiting further guidance to confirm this. (You can read more about the JSS and the original Winter economy Plan here)
Additionally, the Job Retention Bonus will not be paid in February 2021, and a similar retention incentive is promised to be deployed at the appropriate time. However, the government has also announced that business premises forced to close in England are to receive grants worth up to £3,000 per month under the Local Restrictions Support Grant.
Should you require any advice regarding the CJRS, please do not hesitate to contact a member of our team.