Coronavirus Update – Furlough Scheme Extension “Extended”
On Saturday, the Government, having already announced a lockdown that will affect England from 5th November until December, extended and amended the Coronavirus Job Retention Scheme (“CJRS”) (“furlough”).
The key announcements were;
- The CJRS is extended until December
- The level of the grant will be 80% of wages subject to a cap of £2,500
- Flexible furloughing of staff will continue in addition to full time furloughing of staff
- The employer will have to pay the NIC and Pension contributions for the hours that the member of staff does not work
- Eligible employees must have been on the employers payroll at 23.59 on 30th October 2020
Without taking any credit for foresight, I suggested that was no such thing as a forward plan at present with events conspiring to “move goalposts” on a regular basis.
Therefore, it will come as no surprise to note that on 5th November the Government extended the extension to CJRS.
The link is set out below;
Extension to the Coronavirus Job Retention Scheme
It is quite a detailed “policy paper” setting out the following keynote issues;
- CJRS will remain open until 31 March 2021
- For claim periods (1 November to 31 January 2021) employees are eligible to receive 80% of their usual salary up to a £2,500 maximum
- The Government will review the position and report further in relation to claims to be made in February and March 2021
- Full guidance is to be published on 10 November 2020
- Employers are eligible for CJRS payments in relation to employees who were employed on 30Th October 2020 and where the employer made a RTI PAYE submission on behalf of the employee between 20th March 2020 and 30th October 2020
- CJRS can be used flexibly in terms of time, shift pattern, full or part time employees
- Employees do not have to have been subject to a CJRS claim previously
- Employers will only be responsible for Employer NIC and pension contributions on behalf of employees
- In January the Government will reconsider this proposal and look to see if it would be appropriate to ask employers to make a larger contribution toward the CJRS cost
- Where the employee works flexibly, the employer is responsible for the wages, NIC and pension contributions when the employee is at work
- Employees can be “furloughed” because they are “shielding in line with public health guidance” or where they have “caring responsibilities” arising from coronavirus; CJRS is not intended for short term sickness absences – these must be paid subject to Statutory Sick Pay (SSP) guidelines
- Employees made redundant but who were on the payroll on 23 September 2020 (and for whom an RTI PAYE submission on behalf of the employee was made between 23rd September 2020) can be re-employed and be subject to a CJRS claim
Duties on furlough
- Employees who are furloughed can take part in training or volunteer
- Employees retain their employment rights throughout the CJRS period
Payment of CJRS monies
- Employers must deduct and account in full for tax withheld by the employer from payments made to employee on furlough
Furlough and Employee Agreement
- Employers are free to use furlough as they wish; there is no minimum time period or pattern of work
- Employers must discuss changes in employment under CJRS staff and reach an agreement with each employee
- Such agreements and a record of work must be retained by the employer for 5 years and 6 years respectively
- Claims will follow on from the previous methodology and will adapt to enable new employees with less than a year of service to have earnings extrapolated to determine claims
- This will include claims made in anticipation of a payroll run
- Claims will be open from 8 am on 11th November 2020 and claims for each calendar month must be made by 14th of the following month
- Payments are expected within 6 working days of the claim
Job Retention Bonus (“JRB”)
- The JRB, to be paid on 31st January, is withdrawn as the “policy purpose of the JRB has been (superseded by the extension to the CJRS)
It is remarkable that such a financial package is on offer although the version of events that would result should such arrangements not exist are deeply concerning. In some cases employees will have furloughed for almost an entire year and worryingly with little real prospect of a return to work.
When combined with loans to companies, the support for the self-employed, tax deferrals (VAT, PAYE), rates and other local authority reliefs, this is a monster package that the country will be repaying for many years to come.
Politics aside, it is to be hoped by us all that the virus can be managed because the strain upon the UK economy, however big it may have been in world economic terms, will soon reach the point where any recovery may take a generation to reverse.
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