Furlough scheme update

As the government announced a further period of lockdown, they gave some gentle relief to employers in the form of a further extension to the furlough scheme (the Coronavirus Job Retention Scheme or CJRS).

How long does Furlough run for?

The CJRS will now run until December 2020 and is available to all employers and their employees although certain conditions must be met.

How many hours can I furlough for? You are eligible to claim CJRS for your employee – be they nanny, housekeeper, or au pair – provided they meet the criteria set out below.

Conditions required to qualify for CJRS:

• This extended Job Retention Scheme will operate as the previous scheme did, with businesses being paid upfront to cover wage costs. There will be a short period when we need to change the legal terms of the scheme and update the system and businesses will be paid in arrears for that period.
• The CJRS is being extended until December. The level of the grant will mirror levels available under the CJRS in August, so the government will pay 80% of wages up to a cap of £2,500 and employers will pay the employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work.
• As under the current CJRS, flexible furloughing will be allowed in addition to full-time furloughing.
• Further details, including how to claim this extended support through an updated claims service, will be provided shortly.
• The Job Support Scheme will be introduced following the end of the CJRS.
• Businesses will have the flexibility to bring furloughed employees back to work on a part-time basis or furlough them full-time, and will only be asked to cover National Insurance and employer pension contributions which, for the average claim, accounts for just 5% of total employment costs.
• The Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends.
• Additional guidance will be set out shortly.
• This extended Job Retention Scheme will operate as the previous scheme did, with businesses being paid upfront to cover wage costs. There will be a short period when we need to change the legal terms of the scheme and update the system and businesses will be paid in arrears for that period.
• The furlough scheme is being extended until December. The level of the grant will mirror levels available under the CJRS in August, so the government will pay 80% of wages up to a cap of £2,500 and employers will pay the employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work.
• Employers small or large, charitable or non-profit, are eligible for the extended Job Retention Scheme, which will continue for a further month.

Eligible persons for the scheme:

Employees

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.

*As under the current CJRS rules:

Employees can be on any type of contract. Employers will be able to agree with any working arrangements with employees.

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 employer

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

The government expects that publicly funded organizations will not use the scheme, as has already been the case for CJRS, but partially publicly funded organizations may be eligible where their private revenues have been disrupted. All other eligibility requirements apply to these employers.

All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.