Job Support Scheme guidance published and scheme postponed – Coronavirus Job Retention Scheme extended
Posted: November 2, 2020
Posted: 02 November 2020
On the eve of the Job Support Scheme (JSS) going live from 1 November 2020, the Prime Minister announced another period of lockdown in England, beginning on Thursday 5 November to last 4 weeks to 2 December 2020.
As a result of the lockdown measures, the Chancellor announced that the Coronavirus Job Retention Scheme (CJRS) otherwise known as the ‘Furlough Scheme’ would not cease on 31 October 2020 and would be extended to December 2020.
The new Job Support Scheme (JSS Open and JSS Closed) would be postponed until the furlough scheme ends.
Key Features of CJRS
- This extended Coronavirus Job Retention Scheme will operate as the previous scheme did, with businesses being paid upfront to cover wages costs. There will be a short period when we need 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 December. The level of the grant will mirror levels available under the CJRS in August, so the government will pay 80% of wages up to a cap of £2,500 and employers will pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work.
- As under the current CJRS, flexible furloughing will be allowed in addition to full-time furloughing.
- Further details, including how to claim this extended support through an updated claims service, will be provided shortly by HMRC.
Eligibility – employers
- 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.
Eligibility – employees
- To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 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 30th 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. 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.
- For hours not worked by the employee, the government will pay 80% 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.
Important information to note
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.
If you agree to flexibly furlough employees, you will need to agree this with the employee and keep a new written agreement that confirms the new furlough arrangement. You need to:
- Make sure that the agreement is consistent with employment, equality and discrimination laws
- Keep a written record of the agreement for 5 years
- Keep records of how many hours your employees work and the number of hours they are furloughed (i.e. not working)
Further information can be found at https://www.gov.uk/government/news/furlough-scheme-extended-and-further-economic-support-announced
We shall update further once detailed guidance is made available by HMRC. If you have any questions on this please email: firstname.lastname@example.org