Coronavirus Job Retention Scheme

As announced by the Chancellor the scheme will be extended until 30 April 2021.

Under the Coronavirus Job Retention Scheme all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.

People and businesses across the UK are being provided with additional financial support as part of the Government’s plan for the next phase of its response to the coronavirus outbreak.

Throughout the crisis the Government’s priority has been to protect lives and livelihoods. The Government said the Coronavirus Job Retention Scheme (CJRS) - also known as the Furlough scheme - will now remain open until April, with employees receiving 80% of their current salary for hours not worked, up to a maximum of £2,500.

Job Retention Scheme

Employers small or large, charitable or non-profit, are eligible for the extended Job Retention Scheme.

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 which, for the average claim, accounts for just 5% of total employment costs.

The Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends.

Details:

Job Retention Scheme

  • The CJRS is being extended until April 2021. The level of the grant will mirror levels available under the CJRS in August, so the Government will pay 80% of wages up to a cap of £2,500 and employers will pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work.
  • As under the current CJRS, flexible furloughing will be allowed in addition to full-time furloughing.
  • The new claims portal went live on 14 November – employers wishing to make Coronavirus Job Retention Scheme (CJRS) claims relating to periods beginning on, or after, November 1, 2020 can now apply
  • Employers across the UK can claim whether their businesses are open or closed
  • It is now mandatory for claims to be submitted by the 14th day of the month following the period that the claim relates to. Where the 14th day falls on a non-working date, the deadline is shifted to the next available working date.
  • The Job Support Scheme will be introduced following the end of the CJRS.

Who is eligible?

Employers

  • 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.
  • 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. All other eligibility requirements apply to these employers.

Employees

  • 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.
    *As under the current CJRS rules:
  • Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees.
  • 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.

The information that we have provided is for general purposes only and therefore does not constitute professional advice. Appropriate professional advice should be sought for individual circumstances before any further action is taken.