The Coronavirus Job Retention Scheme (CJRS) has been extended for four-and-a-half week to assist businesses and their employees during the new lockdown restrictions in England.
1. What will this mean for those who were due to move from the CJRS onto the Job Support Scheme (JSS) from 1 November 2020?
The Coronavirus Job Retention Scheme has been further extended from 1 November until 2 December 2020. Those (in England) who were due to take advantage of the new Job Support Scheme, which was due to commence on 1 November 2020,
The Job Support Scheme has been postponed and will be introduced following the end of the CJRS. The two schemes will not run concurrently.
2. What happens if an employee has already formally agreed to move onto the Job Support Scheme from 1 November 2020?
Due to the changes announced by the UK Government on 31 October 2020, the Job Support Scheme has not yet come into effect; therefore, an employer or employee cannot be conditioned by terms and conditions of the proposed scheme. Any agreement (which should have been made in writing) between the two parties shall effectively be null and void until the Job Support Scheme comes into effect.
3. Will I need to seek the agreement of my employee(s) to be placed on the Coronavirus Job Retention Scheme from 1 November 2020?
Under the guidance produced by HMRC, those eligible and wishing to take advantage of the Coronavirus Job Retention Scheme, it only requires employers to “confirm in writing” that an employee has been furloughed. The employee does have to provide a written response; however, it is good practice for the employer and employee to keep a record of what has been agreed to avoid any ambiguity or potential misunderstanding at a later date.
If there was an agreement in place that stipulated that the Scheme, and the benefits associated to it, would cease on 31 October, the employer should confirm in writing to the employee that their period of furlough; whether full or flexible, has been extended until at least 2 December 2020, from which they may or may not have their period of furlough extended under the terms of Job Support Scheme. Moving an employee from one scheme to another should constitute as separate agreement between the employer and employee.
4. How does the extended Coronavirus Job Retention Scheme work?
This extended CJRS will operate as the previous scheme did, with businesses (in England) being paid upfront to help cover employees’ salary. There will be a short period when the Government will need to change the legalities relating to the scheme and update the system, whereby businesses will be paid in arrears for that period.
5. What grant assistance is available under the extended Job Retention Scheme?
The Government will pay 80% of furloughed employee’s wages up to a cap of £2,500 and employers will pay employer National Insurance (NI) and pension contributions only for the hours the employee does not work. This is currently for the period 1 November 2020 to 2 December 2020. Flexible furloughing will be allowed in addition to full-time furloughing. Employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
6. What employees are eligible to be furloughed under the extended Coronavirus Job Retention Scheme
Employees must be on an employer’s PAYE payroll by 23:59 on 30 October 2020. This means a Real Time Information (RTI) submission, notifying payment for that employee to HMRC must have been made on or before 30 October 2020.
- Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees.
- Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period.
- When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of seven consecutive calendar days.
- Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
- For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and national insurance (NI) contributions due on those amounts.
7. ‘How to Claim’ for the Coronavirus Job Retention Scheme?
If you do not finish your claim in one session, you can save a draft. You must complete your claim within 7 days of starting it. If you want to delete a claim in the online service, you must do this within 72 hours of starting it.