Coronavirus Job Retention Scheme - Extension

The Coronavirus Job Retention Scheme (CJRS) had been winding down over the last couple of months and was set to end on 31st October 2020.  The Job Support Scheme (JSS) was then due start to 1st November 2020.

However, the Government announced on 5th November 2020, that CJRS would be extended until 31st March 2021, not December 2020 as previously announced on 31st October 2020.  Further guidance was published on 10th November 2020 and can be found here. The Chancellor made a further announcement on 17th December 2020, that the Coronavirus Job Retention Scheme will be extended to the end of April 2021. Following the 2021 Budget, the scheme will now continue until 30th September 2021.

What support will be provided?

  • Up to 30th June 2021, employers can claim for 80% of the furloughed employee’s current wages for time not worked, up to a maximum of £2,500 per month.  From 1st July 2021, the level of grant reduces to 70% of salary for hours not worked and from 1st August 2021 to 60%.

  • Employers can top up the employee’s furlough pay at their own expense, if they wish.

  • Employees must be paid in accordance with their employment contract (which may be amended by agreement).  The employee must be paid at least as much as the gross pay element of the grant received from HMRC.

  • In addition to paying for all hours that an employee has worked, from 1st July 2021 employers must contribute 10% towards the cost of unworked hours and from 1st August 2021 they must contribute 20% towards the cost of unworked hours.

  • The employer must pay for all of the employer’s NIC and employer’s minimum workplace pension contributions on those wages.

Eligibility Criteria

Employers

  • All employers with a UK bank account.

  • All employers across the UK can claim, whether their businesses are open or closed.

  • Charities can claim in respect of their employees, but public sector bodies and publicly funded organisations are expected not to use the scheme.

Employees

  • Up until 1st May 2021, employees notified by RTI submission to HMRC on or before 23:59 on 30th October 2020 will be eligible.  From 1st May 2021, employees who were employed prior to 3rd March 2021 will be eligible (ie were on a RTI report between 20th March 2020 and 2nd March 2021).

  • Employees employed as of 23 September 2020 (day of Job Support Scheme announcement) and notified to HMRC by RTI on or before that date, who have been made redundant can be rehired and placed on the Scheme for November.

  • Employees don’t need to have been furloughed previously and been included in an earlier CJRS claim, to take part.

  • Employees on any type of contract can qualify, including zero hours, contractors and sole directors.

 Furlough

  • Flexible furlough is permitted alongside full-time furlough, so staff may be brought back part time.

  • There is no minimum furlough period, but each furlough claim must be for a period of at least 7 consecutive calendar days.

  • Employees need to sign to agree their acceptance to any revised furlough arrangements.  Only retrospective furlough agreements (ones that have effect from 1 November 2020) put in place up to and including 13th November 2020 may be relied upon for the purposes of a CJRS claim.

  • As under CJRS previously, whilst on furlough, employees cannot do any work for their employer that makes money or provides services for their employer or any organisation linked with their employer.

  • Employees can take part in training, volunteer for another employer or organisation or work for another employer if contractually allowed.

  • If contractually allowed, your employees are permitted to work for another employer whilst you have placed them on furlough.

Claims

  • The employer will have to report the hours that an employee has worked in a claim period and their usual hours.

  • Claims can be made up to 14 days from the end of a pay period.

  • The CJRS grant should be paid within 6 working days of the claim being submitted.

  • HMRC will publish details of employers who make claims under the extended CJRS scheme, starting from December 2020.

  • Claims for each month must be submitted by day 14 of the following month.

Calculations

  • For employees that meet the eligibility criteria, and were previously furloughed, employers must use the same calculations for calculating reference pay and usual hours as CJRS.

  • For an employee who meets the criteria of the extended scheme but was not previously eligible for CJRS, the alternative calculations of reference pay and usual hours must be used. Further details can be found here.