With the Coronavirus Job Retention Scheme (CJRS) coming to an end on the 31st October 2020, more announcements surrounding the Job Retention Bonus (JRB) and the Job Support Scheme (JSS) were released at the weekend.
In our previous post, “Latest on the Job Retention Bonus – how will it work?” we gave the first details on the JRS. However, details surrounding the JSS which is soon to replace the CJRS were still unclear.
The Coronavirus Job Retention Scheme is coming to an end
In addition to the CJRS ending on the 31st October 2020, it has now been confirmed that the final day for employers to submit or change claims for the period ending the 30th October 2020 will be the 30th November 2020.
This means that any outstanding claims or claim amendments must be finalised before the 30th of November for claiming employers to avoid missing out. With the CJRS ending, what measures is the Government introducing in its place?
The Job Retention Bonus has been announced, but some details remain unclear
This bonus, intended to incentivise employers to keep furloughed workers employed rather than making them redundant, involves a one-off £1,000 bonus to employers.
We also know:
- The JRB is available to every employer in respect of each employee that has been furloughed and had a claim submitted to HMRC under the CJRS, they must also remain employed on 31st January 2021
- It is an employer bonus, so there is no obligation for the bonus to be passed on to the employee, however employers are able to do so if they wish in which case it must go through the PAYE scheme as normal PAYE income
- The bonus must be reported through the employer’s accounts as income, and if applicable Corporation Tax or Income Tax applied on the bonus
- Qualifying criteria must be met for a valid claim – qualifying employees must have previously been furloughed between 6th November 2020 and 5th February 2021 and must be paid at least £1,560 in taxable income
- Real Time Information (RTI) reports to HMRC must be made on time and have been made on time for the whole of the period 6th April 2020 to 5th February 2021
- Claims for the JRB can only be made between 15th February 2021 and 31st March 2021, outside of these dates claims will not be accepted
However it is still unclear what the claims procedure will be, and how long it will take for HMRC to make the payment.
What we know so far about the Job Support Scheme
Announced on the 24th of September, the Job Support Scheme (JSS) is designed to replace the CJRS and support employers to keep their employees on the workforce and avoid mass redundancies.
Whilst full details of the scheme are yet to be announced, we have been given some information. So far we know the following:
- The scheme begins on the 1st November 2020 and will run for 6 months, closing in April 2021
- The Government will pay a third of the hours not worked by employees up to a maximum of £697.92 per month
- The company will continue to pay employees for hours worked, the time not worked being split between the Government and the employer
- Employees will be guaranteed to earn a minimum of 77% of their normal wages (where the Government contribution has not been capped)
- Employers with a UK bank account and PAYE scheme are eligible, however large businesses must pass a turnover test
- Employers do not have to have previously claimed through the CJRS to claim under the JSS
- Eligible employees must be on the employer’s payroll on or before 23rd September 2020 and an RTI submission made to HMRC notifying of payments made to qualifying employees
- The employee must work at least 33% of their usual hours
- Short term working must be for a minimum of 7 days
- Employees do not have to have the same working pattern each month
- The Government grants will be made in arrears
- The grant does not fund employers NIC and pension contributions
- Employees cannot be made redundant or be on notice of redundancy during the period the employer is claiming under the JSS
- Claims can be made online from December 2020 and will be paid on a monthly basis
A note on redundancies
Whilst the Government is taking multiple measures to try and reduce the scale of redundancies that will be made once the CJRS comes to an end, it is inevitable that not all jobs will be able to be saved. The following updates have been issued regarding redundancies and the CJRS:
- Redundancies and notice pay must be paid at the employee’s normal rate of pay, not the 80% that has been made payable to employees through the CJRS
- The employee’s normal rights still apply despite being furloughed, including contractual and implied rights
- Employers can continue to claim for a furloughed employee through the CJRS for an employee who is serving a statutory or contractual notice
- Furlough support cannot be used to pay any kind of redundancy or Pay in Lieu of Notice (PILON) payment