As part of the latest lockdown measures, the government has extended the current Coronavirus Job Retention Scheme (otherwise known as furlough) until 31st March 2021.
It will run the same way as it did in August.
More guidance is expected, but the top points to note are:
- Coronavirus Job Retention Scheme (CJRS) – will remain open until March, with employees receiving 80% of their current salary for hours not worked, up to a maximum of £2,500.
- Employers small or large, charitable or non-profit, are eligible.
- Businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time, and will only be asked to cover National Insurance and employer pension contributions.
- This extended Scheme will operate as the previous scheme did, with businesses being paid upfront to cover wages costs. There will be a short period when the government need to change the legal terms of the scheme and update the system and businesses will be paid in arrears for that period.
- The Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends. The Job Retention Bonus has also been put on hold and may be replaced with another incentive after March.
- As under the current CJRS, flexible furloughing will be allowed in addition to full-time furloughing.
- To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.
- Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Such calculations will broadly follow the same methodology as currently under the CJRS.
- When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days.
- Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
- For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.
- All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.
As soon as further guidance is released we will update you, but please get in touch if you want to discuss what this means for your business. You can read the government press release here.