Coronavirus Job Retention Scheme extended
The Coronavirus Job Retention Scheme has now been extended for a month. What are the terms of the extension and where does this leave the new Job Support Scheme?
Under the terms of the Coronavirus Job Retention Scheme (CJRS) extension, employees will continue to receive 80% of their usual pay for hours not worked, up to a maximum cap of £2,500, and you will retain the flexibility to bring furloughed employees back to work on a part-time basis (flexible furlough) or furlough them full time (full furlough). The government will pay the 80% and you will only be asked to cover employers’ NI and pension contributions for furloughed hours, which is effectively the same level of CJRS grant as applied in the month of August. You must also continue to pay the employee for any hours worked in the normal way. The other key points are:
- the extended CJRS will operate in much the same way as the current CJRS, with employers being paid upfront to cover wage costs, but there will be a short delay in payment whilst the government updates its systems and so you’ll be paid in arrears for that period
- all employers with a UK bank account and UK PAYE scheme can claim the extended CJRS grant – neither you nor the employee needs to have previously used the CJRS
- to be eligible to be claimed for under the extended CJRS, employees must be on your PAYE payroll by 23:59 on 30 October 2020 – this means an RTI submission notifying payment for that employee to HMRC must have been made on or before 30 October 2020
- as under the current CJRS rules: employees can be on any type of contract and you’ll be able to agree any working arrangements with them; you can claim the grant for the hours your employees aren’t working, calculated by reference to their usual hours worked in a claim period; when claiming the extended CJRS grant for furloughed hours, you’ll need to report and claim for a minimum period of seven consecutive calendar days; you’ll need to report hours worked and the usual hours an employee would be expected to work in a claim period; and for worked hours, you’ll need to pay employees under the terms of their employment contract and you’ll be responsible for paying the NI and income tax due on those amounts
- you can choose to top up employees’ wages above the extended CJRS grant at your own expense if you wish, but you don’t have to do so
- there will be no gap in eligibility for support between the previously announced end-date of the current CJRS and the extension.
It’s not clear yet whether the extended CJRS will cover just the calendar month of November, or whether it will run until 2 December, which is the date when the new national restrictions are due to end.
The commencement of the Job Support Scheme (JSS), which comprises JSS Open (for open business premises) and JSS Closed (for closed business premises), has been postponed until the CJRS ends. The JSS will then be introduced following the end of the CJRS.
Further guidance, including on how to claim the extended CJRS support through an updated claims service, is expected to be published shortly.
Furlough can be flexible or full and the government will then fund 80% of employees’ usual pay for their furloughed hours, subject to a cap of £2,500. You only need to pay employers’ NI and pension contributions on that furlough pay, plus employees’ contracted wages for any worked hours. The Job Support Scheme has been postponed and will now be introduced after the extended CJRS ends.