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To support individuals and businesses in dealing with the challenges created by Covid-19, the Government has announced it’s extending the Coronavirus Job Retention Scheme until March 2021 and postponing the Job Support Scheme. We’ve put together a quick guide to what this means.
The extended Coronavirus Job Retention Scheme (CJRS)
Following the further national lockdown in England, the Job Support Scheme (JSS) has been postponed and the Coronavirus Job Retention Scheme (CJRS) has been extended across all of the UK.
The JSS was due to come in to place on November 1. The requirements of the scheme meant employees must be working at least 20 percent of their normal hours and would be paid for that period of working by their employer. For the remaining hours not worked, the employer would contribute 5% and the government would provide up to 61.67% of wages for hours not worked.
However, the JSS has been postponed until the CJRS extension ends in March 2021.
Under the continued CJRS, employees can be fully furloughed or working part-time, receiving 80 percent of their current salary for hours not worked, up to a maximum of £2,500. The government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.
A significant point to note is that employers can also furlough employees they have not previously furloughed under the CJRS.
Businesses will remain liable for employer liabilities such as National Insurance and employer pension contributions.
CJRS extension round-up
- This extended Job Retention Scheme will operate as the previous scheme did, with businesses being paid upfront to cover wage costs. There will be a short period when the government needs to change the legal terms of the scheme and update the system and businesses will be paid in arrears for that period.
- The CJRS is being extended until March 2021. The level of the grant will mirror levels available under the CJRS in August, so the government will pay 80 percent of wages up to a cap of £2,500 and employers will only pay National Insurance Contributions (NICs) and pension contributions for the hours the employee does not work.
- As under the current CJRS, flexible furloughing will be allowed in addition to full-time furloughing.
- The Job Support Scheme will be introduced following the end of the CJRS.
Employer Eligibility Criteria
- All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.
- The government expects that publicly funded organisations will not use the scheme, as has already been the case for CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted. All other eligibility requirements apply to these employers.
Employees Eligibility Criteria
- To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before October 30th 2020.
As under the current CJRS rules:
- Employees can be on any type of contract and 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. Such calculations will broadly follow the same methodology as currently under the CJRS.
- When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 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 NICs due on those amounts.
What support is being provided and employer costs:
- For hours not worked by the employee, the government will pay 80 percent of wages up to a cap of £2,500. The grant must be paid to the employee in full.
- Employers will pay employer NICs and pension contributions and should continue to pay the employee for hours worked in the normal way.
- As with the current CJRS, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
- The government will confirm shortly when claims can first be made in respect of employee wage costs during November, but there will be no gap in eligibility for support between the previously announced end-date of CJRS and this extension.
We’ve been helping our clients by claiming over £50 million in furlough claims on their behalf. Should you require any support or guidance with the CJRS or the new JSS learn more about our HR solutions and get in touch.
Payroll Director, Capita
Phil is the Director of Payroll for the HR Solutions & responsible for all payroll delivery, statutory compliance & best practise initiatives across three centres of excellence UK wide. Phil has over 15 years experience in large scale outsourced payroll delivery and shared services. Phil has strategically managed multiple Payroll teams to deliver services in line with agreed business service level agreements & legislative requirements, continually challenging the status quo to deliver an efficient, accurate service whilst striving for continuous improvement.