Following discussions around support for businesses through the winter in light of a second national lockdown, Chancellor Rishi Sunak has announced that the Government will be extending the furlough scheme until the end of April 2021.
The scheme will pay up to 80% of an employee’s wages up to £2,500 per month and is set to be reviewed in January to decide whether employers should contribute, as they did towards the end of the original furlough scheme.
This is welcome news for many businesses who have been forced to close or have seen reduced demand as a result of COVID-19.
SO, WHAT’S CHANGED WITH THE EXTENDED JOB RETENTION SCHEME?
The extended Coronavirus Job Retention Scheme will be slightly different from the version of the scheme which employers were using up to the end of October, and employers should note the following key points:
– The level of the grant will mirror levels available under the CJRS previously seen in August. The Government will pay 80% of wages up to a cap of £2,500.
– Employers will pay employer NICs and pension contributions, and should continue to pay the employee for hours worked in the normal way.
– To be eligible to claim under the extension, 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.
– Neither the employer nor the employee needs to have previously used the CJRS.
– Flexible furloughing will be allowed in addition to full-time furloughing.
– Employees can be on any type of contract – full time, part time, zero hours etc.
– 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. Such calculations will broadly follow the same methodology as the original CJRS.
– 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.
– All employers with a UK bank account and a UK PAYE scheme are eligible, however, there are restrictions for publicly funded organisations, as per the original scheme, but with some relaxations for partially public funded organisations whose private revenues have been disrupted.
We’re still awaiting full details of how the extended CJRS scheme will work, with more guidance expected in due course.
However, we do know that for employers who had already communicated to employees they were to be placed on the Job Support Scheme, it will be required to appropriately document the change to the extended CJRS scheme.
WHAT WILL HAPPEN TO THE JOB SUPPORT SCHEME?
It appears that the introduction of the Job Support Scheme is now deferred until the end of the furlough scheme.
FURTHER INFORMATION
For advice tailored to your situation, or support with submitting your claims once the system is live, please speak to your usual PM+M representative, or get in touch on enquiries@pmm.co.uk and we’ll direct you to the right person.
This information is correct as of 17 December 2020. This blog is for general guidance only. Recipients should not act upon any of the information provided without seeking specific professional advice tailored to your circumstances, requirements or needs. Please contact PM+M before making any decisions based on any matters relating to this blog.
