Coronavirus Job Retention Scheme (CJRS) now further extended until 31 March 2021
On 5 November 2020, the Chancellor announced that the CJRS will be extended until 31 March 2021. Because of this extension the Job Retention Bonus will no longer be payable in February 2021, and the Job Support Scheme has been postponed. Below we detail the main points employers should be aware of and list the key dates you need to pay attention to under the new extended scheme.
• To claim under the extended scheme, employers don’t need to have used CJRS previously and employees don’t need to have already been furloughed
• The extended scheme will run from 1 November 2020 to 31 March 2021
• In the initial period the grant available will be 80% of employees’ wages for the non-worked hours up to a cap; employers will only have to pay for NICs and pension contributions (same position as in August under the original scheme); this will be reviewed in January 2021
• The extended scheme will improve transparency and HMRC will publish details of employers who make claims under the extended CJRS scheme
• Full guidance will be published on Tuesday 10 November 2020
Which employers can claim?
• Employers across the UK can claim, whether their businesses are open or closed; they don’t need to have used the original 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
• To be eligible for the grant, employers must have confirmed to their employee in writing that they have been furloughed or flexibly furloughed, a written record of this must be kept for 5 years and a record of hours worked, and hours furloughed must be kept for 6 years. The November agreements can be retrospective but must be put in place by 13 November in order to be relied upon for the November claim.
• Flexible furlough will continue to be allowed. This means that employers will have flexibility to use the scheme for employees for any amount of time or shift pattern, furloughing employees on either a full-time or part-time basis, and will be able to vary the hours worked in agreement with the employee.
Which employees are eligible?
• Employees do not need to have been furloughed under the CJRS previously
• Employees can be on any type of contract
• To be eligible under the extended scheme, the employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee
• Employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer afterwards can be re-employed and claimed for; this also applies to those whose fixed term contracts expired after 23 September
• Employees can also be furloughed where they are shielding with public health guidance or have caring responsibilities resulting from coronavirus (including childcare); in some cases furlough will also be appropriate for those who are ill
How much can be claimed and when can we claim?
• For claims between 1 November 2020 and 31 January 2021, employers will be able to claim a grant for 80% of usual wages up to a maximum Government grant of £2,500 per month, per employee, for the time the employee spends on furlough; the £2,500 cap is proportional to the hours not worked
• During the CJRS extension, until January employers will be required to only cover National Insurance and employer pension contributions
• The Government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more
• Claims will have to cover at least 7 days in duration and must start and end in the same month; most employers will submit one claim per calendar month and calculations must be adjusted to reflect this where payroll is not run monthly
• Going forward employers will have less time to make the claims – for November the claim will need to be submitted by 14 December; the subsequent months’ claims will have to be made by 14th of the following month
• To be eligible under the extended scheme, employees must have been on the employer’s payroll (reported on the payroll RTI return to HMRC) on 30 October 2020
• The extended CJRS will be in place from 1 November 2020
• Final details will be published in the guidance expected on 10 November 2020
• Employer – employee furlough agreement for November can be retrospective but it must be put in place by 13 November at the latest
• Submission of November claims will be possible from 11 November and will have to be submitted by 14 December. Subsequent months’ claims will also have to be submitted by 14th of the following month, allowing employers less time for submissions compared to the original CJRS
• October claims under the original CJRS must still be submitted by 30 November; retrospective claims will not be accepted after this date
• The extended CJRS employer contributions will be reviewed in January 2021 and any changes then confirmed for February and March claims
What do you have to do?
If you wish to claim under the scheme you should:
• Put appropriate agreements in place with the employees by 13 November
• Keep records of the agreement (for 5 years) and keep records of hours worked and hours furloughed (for 6 years)
• Pay employees as normal for the hours worked
• Calculate the 80% pay for the hours not worked according to the Government guidance on calculations (different for previously furloughed and newly furloughed staff) or seek appropriate help in making the required calculations
• You can choose to top up the Government grant so that employees still receive 100% of their normal wages, but you don’t have to
• Continue to operate PAYE for your employees and pay employer National Insurance contributions and pension contributions for employees on the full amount that you pay the employee, including any scheme grant
• Submit the claim and check the correct payment is made within 6 working days from the submission
At CBW we continue to work tirelessly to support our payroll clients with these claims and we can also offer assistance to those who we don’t act for as a PAYE agent. Please get in touch with our HR Consultancy team if you would like more information or require help with any of the above.