On Thursday 5th October 2020, Chancellor Rishi Sunak announced, that the Coronavirus Extension Scheme will be extended until 31st March 2021.
Full guidance on the CJRS extension has now been published and can be viewed on the gov.uk website.
To help you understand the changes to the CJRS extension from 1st November 2020, we have put together some helpful FAQs regarding the changes to the CJRS for you to read:
How long has the CJRS been extended to?
CJRS has been extended to 31st March 2021 for all parts of the UK.
How much will the UK government contribute to the CJRS?
From 1st November the UK government will pay 80% of employees usual wages for the hours not worked up to a cap of £2,500 per month. This will be reviewed in January.
How much will I need to contribute?
- Employers will be required to pay their employees National Insurance Contributions and pension contributions.
- Employers will be required to pay employees for the hours their employees work under the flexi-furlough agreement.
- Employers, can choose to top-up their employees’ wages if they want. This will be at the employers own expense.
Who is eligible to claim under the CJRS?
Employers can claim for employees who were employed on or before 30th October 2020, so long as they have made a PAYE RTI submission to HMRC between 20th March 2020 and 30th October 2020. Employers can also claim for an employee if they were re-employed after 23rd September 2020.
Read more about eligibility: Covid-19 Update: We Answer Your FAQs on the CJRS Extension and JSS
Do you need to have used the CJRS previously?
No, you do not need to have benefited from the scheme before to claim for periods from 1st November. As a result, this means there is no maximum number of employees that you can claim for from 1st November.
Can you retrospectively claim for the CJRS from 1 November?
Yes, you can agree to retrospectively furlough someone with effect from 1st November 2020, as long as the agreement to retrospectively claim furlough occurs on or before Friday 13th November 2020.
Can employees’ end their maternity leave and be placed on furlough?
Employees returning from maternity leave need to give the statutory eight week’ notice to end maternity leave early in order to be furloughed.
The guidance does not deal with the issue of an employee and employer agreeing to shorten that eight week period. It seems that you will not be able to agree to shorten the period and an employee must give eight weeks’ notice to end maternity leave.
Can an employee be furloughed if they are required to shield?
If an employee is:
- Unable to work because they are clinically extremely vulnerable, or at the highest risk of severe illness from coronavirus and following public health guidance.
- Unable to work because they have caring responsibilities resulting from coronavirus (Covid-19), including the employees that need to look after children.
They are eligible for the grant and can be furloughed.
Can an employer claim for an employee’s contractual or statutory notice period?
The government is reviewing whether employers should be eligible to claim for employees’ contractual or statutory notice periods and will change the approach for claim periods starting on or after 1 December 2020.
Further guidance will be published in late November.
How do I calculate how much I can claim?
Employees who have a fixed pay:
The reference period is the last pay period ending on or before 19th March 2020 for employees who either:
(a) Were on payroll on 19th March 2020, that is you made a payment of earnings to them in the tax year 2019 to 2020 which was reported to HMRC on a RTI Full Payment Submission on or before 19th March 2020;
(b) You made a valid CJRS claim for in a claim period ending any time on or before 31st October 2020.
For all other employees’, the reference period is the last period ending on or before 30th October 2020; this will only apply for periods starting after 1st November 2020
Employees whose pay varies:
If an employee has variable pay, how you work out their usual wages depends on when they were on your payroll.
Employees’ who were on payroll on 19th March 2020, that is you made a payment of earnings to them in the tax year 2019 to 2020 which was reported to HMRC on a RTI Full Payment Submission on or before 19th March 2020 you should calculate 80% of the higher of:
(a) The wages earned in the corresponding calendar period in the tax year 2019 to 2020; or
(b) The average wages payable in the tax year 2019 to 2020.
This also applies to employees for whom you made a valid CJRS claim for in a claim period ending any time on or before 31st October 2020.
- For all other employees’ you should calculate 80% of the average wages payable between 6th April 2020 (or, if later, the date the employment started) and the day before they are furloughed on or after 1st November 2020.
For further information, please read: Calculate how much you can claim using the Coronavirus Job Retention Scheme
Do you need to put the change in writing?
Yes, you must confirm in writing to the employee that they have been furloughed. You should do this by asking an employee to agree and sign a change of terms letter.
You must also keep the written records for five years.
Will HMRC publish details of employers who use the scheme?
Yes, HMRC intends to publish details of employers who use the scheme for claim periods from December, and employees will be able to find out if their employer has claimed for them under the scheme.
How will I claim for the CJRS from 1 November 2020?
There will be monthly deadlines for claims. Claims for periods starting on/after 1st November must be submitted within 14 calendar days after the month they relate to, unless this falls on a weekend in which case the deadline is the next weekday. For further details on claiming for wages, click here.
When can I begin claiming for the CJRS?
You can apply for the CJRS online from today (Wednesday 11th November), for periods from 1st November. You will need to submit any claims for November by 14th December.
Will we be paid the Job Retention Bonus in February 2021?
Unfortunately not, the government have confirmed that the Job Retention Bonus will no longer be paid in February 2021 and an alternative retention incentive will be put in place at the appropriate time.
When will the JSS come into force?
The launch of the Job Support Scheme has been postponed.
For more information, please get in touch.
