As you know, on Saturday 31 October 2020, HM Treasury announced that the Coronavirus Job Retention Scheme (CJRS), which was due to come to an end that day, would be extended in order to provide support to businesses and employees during the new national lockdown due to begin on Thursday 5 November this week.
The key points to be aware of are:
- The CJRS remains open and at present, is expected to remain open until 1st
- Employers will be able to furlough employees on both a full time and flexible basis.
- The Job Support Scheme, which was due to come into effect on 1st November, has been postponed until the CJRS ends.
- An employer does not need to have previously used the CJRS, nor does an employee have to have been previously furloughed to be eligible.
- The scheme is available in respect of employees who were on the employer’s PAYE payroll by 23:59 on 30 October 2020 (with a Real Time Information (RTI) submission notifying payment for that employee to HMRC having been made on or before 30 October).
- When claiming the CJRS grant for furloughed hours, employers need to report and claim for a minimum period of seven consecutive calendar days.
- The Government will pay 80% of wages up to a cap of £2,500 for hours not worked by an employee, which must be paid to the employee in full.
- Employers must pay employer NICs and pension contributions, and should continue to pay the employee for hours worked in the normal way.
- Employers are still able to choose to top up employee wages at their own expense if they wish.
- Employers will be paid upfront to cover wage costs although there will be a short period where the claims portal will need to be updated and employers will be paid in arrears for that period.
- Claims will need to be for a minimum seven consecutive calendar day period.
On a practical level, employers who wish to take advantage of the scheme have two options, the first is to enter into a further flexible furlough agreement or alternatively, issue employees with a side letter confirming the extension of an employee’s previous flexible furlough agreement albeit on the new terms.
In a bulletin (https://content.govdelivery.com/accounts/UKHMRCED/bulletins/2a9ac8c) sent out on 2 November 2020, HMRC states:
“If employees were on your payroll on 23 September 2020 (i.e. notified to HMRC on an RTI submission on or before 23 September) and were made redundant or stopped working for you afterwards, they can also qualify for the scheme if you re-employ them.”
The HM Treasury announcement (https://www.gov.uk/government/news/furlough-scheme-extended-and-further-economic-support-announced) advises that further guidance on the extended furlough scheme will be published shortly.