The government has extended the Coronavirus Job Support Scheme that was due to end on 31 October. The scheme will remain open until 31 March 2021.
SAME PERCENTAGE AS THE ORIGINAL SCHEME
For claim periods running to January 2021, employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. The £2,500 cap is proportional to the hours not worked.
The government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.
Employers do not need to have used the CJRS previously.
Employers across the UK can claim, whether their businesses are open or closed.
WHO CAN EMPLOYERS CLAIM FOR?
Employers can claim for employees who were employed and on their PAYE payroll on 30 October 2020. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
Employers will have flexibility to use the scheme for employees for any amount of time or shift pattern, furloughing employees on either a full-time or part-time basis, and will be able to vary the hours worked in agreement with the employee.
There is no minimum furlough period. Flexible furlough agreements can last any amount of time. Employees can enter into a flexible furlough agreement more than once.
Although flexible furlough agreements can last any amount of time, unless otherwise specified the period claimed for must be for a minimum claim period of 7 consecutive calendar days.
EMPLOYER CONTRIBUTIONS SAME AS AUGUST
Employer contributions until January will be the same as in August 2020. This means that for hours not worked by their employee, employers will only be asked to cover National Insurance and employer pension contributions. The government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.
Employers will have to pay the employee’s wages for the hours they work as normal, as well as employer National Insurance and employer pension contributions.
EMPLOYEES WHOSE HEALTH HAS BEEN AFFECTED BY CORONAVIRUS OR ARE SELF-ISOLATING
Employees can be furloughed where they are unable to work because they:
- are shielding in line with public health guidance (or need to stay at home with someone who is shielding)
- have caring responsibilities resulting from coronavirus, including employees that need to look after children
The CJRS is not intended for short-term sick absences. If, however, employers want to furlough employees for business reasons and they are currently off sick, they are eligible to do so, as with other employees.
Furloughed employees who become ill, due to coronavirus or any other cause, must be paid at least Statutory Sick Pay (SSP). As under the CJRS previously, it is up to employers to decide whether to move these employees onto SSP or to keep them on furlough, at their furloughed rate.
EMPLOYEES RE-EMPLOYED BY THEIR EMPLOYER
Employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer afterwards can be re-employed and claimed for. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.
WHEN EMPLOYEES ARE ON FURLOUGH
During hours which employees are recorded as being on furlough, they cannot do any work for their employer that makes money or provides services for their employer or any organisation linked or associated with their employer.Employees can:
- take part in training
- volunteer for another employer or organisation
- work for another employer (if contractually allowed)
PAYING EMPLOYEES’ TAXES
Employees will still pay the taxes they normally pay out of their wages.
Employers must deduct and pay to HMRC Income Tax and employee National Insurance contributions on the full amount that they pay the employee, including any scheme grant. The CJRS grant does not cover employers’ National Insurance contributions or pension contributions.
Employers must also pay to HMRC the employer National Insurance contributions on the full amount that they pay the employee, including any scheme grant.
EMPLOYER – EMPLOYEE AGREEMENT
Employers do not need to place all of their employees on furlough and they can fully furlough employees if they wish. Employees cannot undertake any work for their employer during the hours that the employer records them as being on furlough.Employers can:
- fully furlough employees – this means the employee does no work for the employer
- flexibly furlough employees – this means employees can work for any amount of time, and any work pattern and claim the grant for the furloughed hours, with reference to hours the employee would usually have worked in that period
Bayliss Ware Chartered Accountants