November 11, 2020
The Coronavirus Job Retention Scheme (CJRS), also known as the furlough scheme, was originally due to end on 31 October 2020, but the Government has announced its decision to extend the scheme until 31 March 2021.
The CJRS will operate in exactly the same was as before, with businesses being paid upfront to cover their employees’ wages.
From 1 November 2020, employers can claim 80% of wages for hours not worked by the employee, up to a cap of £2,500 per month. Employers will pay National Insurance Contributions (NICs) and pension contributions in the normal way, and are still able to choose to top up employee wages above the CJRS grant at their own expense if they wish, but there is no requirement on them to do so.
Flexible furlough will also continue to be allowed in addition to full-time furlough, allowing employees to work some of their hours and receive furlough pay for unworked hours.
If you’re claiming for a period that ends on or before 31 October 2020, you can only claim if you have previously furloughed your employee before 1 July 2020 and you have submitted a claim for this by 31 July 2020.
If you are claiming for a period that starts on or after 1 November 2020, then you can only claim for furloughed employees that were employed and on the payroll on 30 October 2020. However, these employees do not need to have been furloughed previously in order to qualify.
In order to claim, you will need the Government Gateway user ID and password you received when you registered for PAYE online. If you do not finish your claim in one session, you can save a draft on the Government’s website.
30 November 2020 is the last day you can submit or change claims for periods ending on or before 31 October 2020. Claims from 1 November 2020 must be submitted 14 calendar days after the month you’re claiming for. If this time falls on the weekend then claims should be submitted on the next working day. For example, if you claim for furlough days in December 2020, your claim must be submitted by 14 January 2020.
There is no maximum number of employees you can claim for from 1 November 2020.
The CJRS will remain open until 31 March 2021, although the Government has stated it will carry out a review of the scheme over the winter.
Once you’ve claimed, you’ll receive a reference number. HMRC will then check that your claim is correct and pay the claim amount into your bank account within six working days. You must then keep a copy of the amount claimed and the claim reference, and pay the full amount to your employee.
You should discuss with your employees any changes you are proposing to make to their employment contract and obtain their agreement on such changes.
To be eligible for CJRS, you must have confirmed to your employees in writing that they have been fully furloughed or flexibly furloughed. You must keep a written record of the agreement for five years, and keep records of how many hours your employees work and the number of hours they are furloughed (i.e. not working). You must ensure that the agreement is consistent with employment, equality and discrimination laws.
If your employee has just returned from maternity, shared parental, adoption, paternity or parental bereavement leave and you are claiming in respect of a period that starts on or after 1 November 2020, the normal scheme rules will apply.
At present, yes – notice pay for someone who is working a notice period can be reclaimed through the CJRS (but payments in lieu of notice cannot). However, the Government is currently reviewing whether you should be eligible to claim for employees serving notice periods and may change the approach for claim periods starting on or after 1 December 2020. We are awaiting further guidance on this to be published in late November.
If you made employees redundant, or they stopped working for you on or after 23 September 2020, you can re-employ them and put them on furlough. This applies as long as the employee was employed and on your PAYE payroll on or before 23 September 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made between 20 March and 23 September 2020.
The Job Support Scheme (JSS) (both the Open and Closed Schemes), set to be introduced on 1 November 2020, has now been postponed until the extended CJRS comes to an end in March 2021.
Our employment lawyers will continue to keep you updated on any further changes to the CJRS or the implementation of the JSS.
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