The scheme, also known as the furlough scheme, has been designed to support employers who have been adversely affected by the COVID-19 pandemic and allow them to access a grant covering 80% of eligible employees’ wage costs up to a cap of £2,500 per worker per month.
Coronavirus Job Retention Scheme (CJRS) from 1st November 2020
The CJRS was originally introduced in March 2020 and allowed employers to access a grant covering a portion of their eligible employees’ wage costs. This initially covered staff retained on the payroll but undertaking no work for the employer (known as ‘furloughed’ employees). The scheme was later expanded to include staff who only work a proportion of their normal hours. The scheme was originally due to end on 31st October 2020.
The furlough scheme has now been extended until 31st March 2021. The amount of grant available between November and January will mirror that available under the CJRS in August.
This means that 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.
The level of grant available for February and March 2021 has yet to be determined.
As under the current scheme, flexible furloughing will be allowed in addition to full-time furloughing.
The scheme will be available to all employers with a UK bank account and UK PAYE schemes. Neither the employer nor the employee needs to have previously used the CJRS.
Key points about the Coronavirus Job Retention Scheme
- 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.
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.
How we can help
There are several ways in which we may be able to help. It is always important to get good advice and particularly true in turbulent times like now. If you need help please talk to us on 0208 616 3319 or use our online enquiry form.
Last updated: 13th November 2020This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.