It was announced at the weekend that the Government’s Coronavirus Job Retention Scheme (CJRS) will remain open until December 2020. The timing of this announcement befitting of a Halloween weekend, given that the extension has come about as a result of the country soon entering Lockdown 2.0 as it continues to battle increasing rates of COVID19 infection.
Under the extended CJRS, employees will receive 80% of their current salary for hours not worked, up to a maximum of £2,500 per month – more generous than the previous CJRS that was due to end on 31 October 2020. The Government will pick up the tab, with employers required to pay employer National Insurance Contributions and pension contribution only for the hours that an employee does not work. Employers with a UK bank account and UK PAYE scheme can claim the CJRS grant and neither the employer nor the employee need to have previously used CJRS. However, the employee must be on the employer’s payroll by 23:59 on 30 October 2020. This means a Real Time Information (RTI) submission notifying payment for the employee to HMRC must have been made on or before 30 October 2020. in order for the employer to be eligible to claim the grant under the extended CJRS.
It is also understood that the calculations for working out the CJRS grant for employee wages will follow the same method as the previous CJRS and that employers will need to report and claim for a minimum period of 7 consecutive calendar days. As before, the CJRS grant must be paid to the employee in full.
Employers will be able to flexibly furlough employees, (i.e. put them on part-time furlough) as well as put employees on full-time furlough. Any hours worked by an employee will be paid by their employer as per their employment contract and employers will be responsible for paying the tax and employer National Insurance contributions due on those amounts, as usual.
In light of the extension to CJRS, the Job Support Scheme which was due to come into force on 1 November 2020 will now be postponed until the CJRS ends.
The Government will shortly confirm when CJRS claims can first be made in respect of employee wage costs during November and we expect additional guidance in due course.
In the meantime, if you have any questions about the extension to CJRS or need any assistance with furloughing your employees in order to gain the benefit of the extension, please do not hesitate to get in touch with a member of theEmployment Law Team.