We reported yesterday in our blog post “CJRS extended as England enters second lockdown” that the Coronavirus Job Retention Scheme (CJRS) had been extended until December in light of England entering a second lockdown, and that the Job Support Scheme (JSS) had also been delayed.
Further updates have been released and the Chancellor has now announced, on the 5th November 2020, that the CJRS is now to run until the end of March 2021. This latest update leaves the JSS dead in the water, but hopes to provide additional stability and funding over the coming month as the UK continues to battle the effects of the ongoing Coronavirus crisis.
So, the process of furlough will continue but which employers will qualify for the Government aid package?
Which employers will qualify?
This extension applies to all UK PAYE schemes despite the lockdown only applying to England. Employers who have not previously made a claim under the CJRS can claim for furloughed employees from 1st November 2020.
Which employees will qualify?
For employees to qualify several criteria must be met, including:
- Employees must be on the payroll on 30th October 2020.
- An RTI submission made to HMRC between 20th March 2020 and 20th October 2020, notifying HMRC of payment of earnings for employees for whom a furlough claim is made.
- Employees do not have to have been furloughed previously for a claim to be made.
- A claim can be made for employees who are shielding in line with public health guidance, or who need to stay at home with someone who is shielding.
- A claim can be made for employees who have caring responsibilities due to Coronavirus.
- If an employee contracts COVID-19, SSP can be claimed for 14 days. It is up to the employer to decide after that whether the employee is furloughed/remains on furlough or SSP is claimed.
- Employees who were on the payroll on 23rd September 2020 and were made redundant or stopped working for the employer can be re-hired. The employer must have made an RTI submission notifying HMRC of a payment of earnings from 20th March 2020 to 23rd September 2020.
The process for calculating furlough
Employees who are furloughed under the CJRS extension and have previously been furloughed will follow the same calculations for reference pay and usual hours.
For employees who have not previously been furloughed and a claim submitted to HMRC under the CJRS, reference pay and usual hours will be calculated via the following:
- Reference Pay – for fixed salary employees, 80% of the employees’ wages payable in the last pay period ending on or before 30th October 2020. For employees whose pay varies, the average pay between the commencement of employment or 6th April 2020 (whichever is later) and the last day before the employees’ extension furlough period begins (for most employees this will be the 31st October 2020).
- Usual Hours – for fixed salary employees, for employees not previously furloughed the contractual hours worked in the last pay period on or before 30th October 2020. For employees whose pay varies the usual hours will be the average of hours worked between the start date of the 2020/21 tax year and the date before their extension furlough period commences (for most employees 31st October 2020).
Claimable amounts under the extension
Under the CJRS extension 80% of usual wages up to a maximum of £2,500 per month per employee will be claimable by employers. This cap is proportional to the hours not worked by the employee.
Non-claimable amounts under the extension
As had applied to the CJRS prior to extension, employers will not be able to claim back their employers NIC and pension contributions. They will also not be able to claim for any time worked by the employee or for any amounts that they choose to top their employees’ wages up by on top of the eligible amount under the CJRS.
How will claims be made and when from?
All claims must be made for a minimum of 7 consecutive days, they must also show actual hours worked and usual hours.
Claims can be made from the 11th November 2020, but November claims must have been submitted by the 14th December 2020. For subsequent months claims must be submitted by the 14th of the following month to which the claim relates.
What will happen to the Job Retention Bonus?
The Job Retention Bonus will now not be paid to eligible employers until February 2021.
The Job Support Scheme is still postponed
As we stated yesterday the Job Support Scheme (JSS) has been postponed, however this will now be until the CJRS extension ends in March 2021.
Some details still remain a little unclear, but another update is expected to be released on the 10th of November 2020. As always, Dataplan will review the update in full detail and provide all relevant information as it becomes available.