On 5 November 2020 the Chancellor, Rishi Sunak, announced changes to the package of support measures being introduced as a consequence of a second national lockdown for England. In the original package, the Coronavirus Job Retention Scheme (CJRS) also known as Furlough scheme was extended until the planned lifting of the lockdown on 2 December. The Chancellor has now announced that the CJRS will be extended to the end of March 2021.
What is Extended CJRS/Furlough scheme?
The extended CJRS applies to all of the UK. The scheme follows the flexibility of the CJRS and so can be used for employees for any work pattern, including full-time furlough.
Employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. Calculations will broadly follow the same methodology as under the CJRS. Employees can top up employee wages if they wish. Employees will be paid for worked hours by their Company on the terms in their employment contract.
Under the scheme, companies can claim for the salary received by the employee for hours not worked. Companies will need to cover employer Class 1 National Insurance contributions and Company pension contributions.
There is no gap in support between the previously announced end-date of the CJRS and the extended CJRS.
The government will review the amount of support given in January to decide whether economic circumstances are improving enough so that Companies will need to make more contributions for hours not worked.
Who is eligible for Extended CJRS/Furlough scheme?
All Companies with a UK bank account and a UK PAYE scheme can make a claim. Neither the Company nor the employee needs to have previously claimed or have been claimed for under the CJRS to claim the extended CJRS.
A Company can claim for employees who were employed and on their PAYE payroll on 30 October 2020. 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.
What should you do if you want to claim?
If you are currently claiming CJRS/Furlough – We will continue to claim on your behalf. Let us know if you want to stop.
If you haven’t claimed previously and want to start claiming from 1st October 2020, please follow the steps below.
- Read and understand HMRC Guidance (see below)
- Read and understand the duties of a Company Director (Directors can claim CJRS)
- Carry out a board meeting and pass a board resolution with documented minutes (Template here)
- Issue a Furlough Letter (Template here)
- Complete the form below
We will get in touch with you after receiving the completed form and will submit the claim on your behalf. If your claim is successful, HMRC will pay the grant into your business bank account.
HMRC guidance is still being developed. Below are some links to guidance which will be updated (and continue to be updated) in the next few days:
- Which employees can be put on the CJRS? https://bit.ly/3enpXoU
- Reporting employees’ wages: https://bit.ly/32bbx6y
- Claim for wages: https://bit.ly/3kZQmvu
- How much you can claim: https://bit.ly/3mOKjdR.
Other Key points from Chancellor’s Announcement
Job Support Scheme
As part of the Winter Economy Plan Chancellor Rishi Sunak announced the introduction of the government’s new Job Support Scheme (JSS). There have been two revisions to the plan since then. The JSS was due to be introduced from 1 November until 30 April 2021. We may see the JSS being introduced after March, but the government is planning to review the terms of the JSS in January anyway. As a result, we are not covering the detail of the JSS here.
Jobs Retention Bonus
The Chancellor announced the Jobs Retention Bonus in July. The Bonus was to have provided a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021 and who earned at least £520 a month on average between 1 November 2020 and 31 January 2021.
The purpose of the Bonus was to encourage employers to keep people in work until the end of January. The government now considers that with the extension of the CJRS, the policy intent of the Bonus falls away. The government intends to redeploy a retention incentive at the appropriate time.
How we can help
We appreciate this is a challenging time for many businesses, and the guidance and support available is regularly changing. We will continue to keep our website blog and social media pages up to date with the latest information.
Please be assured that we are here to provide you with support, so please contact us if you have any queries on the extension of the CJRS.