Following Rishi Sunak’s announcement on 24th September 2020, we had all been preparing for the introduction of the Job Support Scheme (JSS). However, on Saturday 31st October 2020, the Prime Minister announced:
“From Thursday until the start of December, you must stay at home.
“You may only leave home for specific reasons [...] This is why we are also going to extend the furlough system through November. The furlough scheme was a success in the spring. It supported people and businesses in a critical time. We will not end it. We will extend it until December.”
England will go into ‘lockdown’ from Thursday 5th November 2020. The restrictions will be in force for a month. To find out more about the restrictions in England, please click here.
If you are based in Wales, the “firebreak lockdown” restrictions have been in place since 6pm on Friday 23rd October 2020. The First Minister of Wales has reassured those living in Wales that the firebreak will end on Monday 9th November 2020 at 12:01am. To find out more about the restrictions in Wales, please click here.
What Does the Announcement Mean for the JSS?
As a result of the Prime Ministers announcement on Saturday, the JSS has been postponed until the furlough scheme ends. At present, we do not have an exact date as to when this will be.
Read more: Everything You Need to Know About the Job Support Scheme: FAQs Answered
Will There Be A Gap in Claiming for the CJRS?
It has been confirmed by the government that there will be no gap in eligibility for support between the previously announced end-date of CJRS and the extension.
What Should I Do Now That the CJRS Has Been Extended?
If you are affected by the restrictions or your business is suffering because of the coronavirus pandemic, you will need to prepare a change of terms letter setting out the variation and ask your employees to agree and sign the letter.
If you have already written to staff with regard to the JSS, you will need to write to them informing them that the JSS has been postponed. You can instead place the employees on furlough; however, they will need to agree to this change in writing (as detailed above).
Please ensure that the employees you propose to place on furlough are eligible for the scheme.
Read more: Coronavirus and Furlough Leave: Your FAQs Answered
Does the Extended CJRS Operate Differently?
The extended CJRS 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 will need to change the legal terms of the scheme and update the system, so that businesses will be paid in arrears.
Can We Continue to Flexi-Furlough Employees Under the Scheme?
Yes, you will be able to flexi-furlough employees, as well as place them on full-time furlough.
How Long Has the CJRS Been Extended For?
The scheme has been extended for one month, until December. We are awaiting further confirmation from the government as to the exact date in December.
How Much Will the Government Contribute to the CJRS?
The government contribution will differ compared to the contribution in October. Instead, it will mirror the contribution levels provided in August. This means that the government will pay 80% of wages up to a cap of £2,500.
What Will We Need to Pay Under the CJRS?
Employers will be required to pay their employees National Insurance Contributions (NIC) and pension contributions.
Employers will also be required to pay employees for the hours their employees work under the flexi-furlough agreement.
Employers, at their own expense, can choose to top-up their employees’ wages if they want.
Who is Eligible to Claim the Extended CJRS?
All employers with a UK bank account and UK PAYE scheme 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. Partially publically funded organisations may be eligible where their private revenues have been disrupted.
To be eligible to be claimed for under the extension, employees must be on an employer’s PAYE payroll by 23:59 on the 30th October 2020. This means Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.
As under the current CJRS rules:
- 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.
How Do We Claim for the Extended CJRS?
The government will confirm when claims can be made and how they can be made in accordance with the extended scheme, during November.
Unfortunately, we do not have an exact date as to when we expect to receive this information.
We will update this blog as and when further announcements are made. However, in the meantime, if you have any employee or employment related questions, please get in touch with our team who will kindly help.