Smarter accounting

Furlough Scheme Extended

1 November 2020, Companies, Creative Industries, Employer, General, Sole Traders

Coronavirus Job Retention Scheme Extended to end of March 2020

The furlough scheme, where the UK Government pays part of the salary costs of furloughed employees, was first extended to the end of November 2020.  Then in an announcement on 5 November 2020 the scheme was extended further until the end of March 2021.

Furlough Scheme Extended

Furlough Scheme Extended (initially) to end of November

The furlough scheme was due to end on 31st October 2020.  The scheme has now been extended until at least the end of November 2020.  Neither the employer nor the employee needs to have previously used the CJRS.  Businesses that started employing people since 28th February 2020 are now eligible for furlough funding.

This extended Job Retention Scheme will operate as the previous scheme did, with businesses being paid upfront to cover wages costs.  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 per calendar month in November December and January.

As under the current CJRS, flexible furloughing will be allowed in addition to full-time furloughing.

Further extension to March 2021

The furlough scheme was due to end in October and then on 2nd December.  The scheme has now been extended again until 31st March 2021.

Corornavirus Job Retention Scheme Extended to March 2021

Funding increase to 80%

The UK Government will pay 80% of salary costs for furloughed workers from 1st November 2020 to 31st January 2021.  The scheme will extend to 31st March 2021, but the funding level will be decided later for claims relating to February and March.

  • For claim periods running to 31‌‌‌ January 2021, the UK Government will pay 80% of employees’ usual wages for hours not worked, up to a cap of £2,500 per month.
  • The UK Government will review the policy in January 2021 to decide whether economic circumstances are improving enough to ask employers to contribute more.
  • Employers will pay employer NICs and pension contributions, and should continue to pay the employee for hours worked in the normal way.
  • As with the current CJRS, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
  • The Government will confirm shortly when claims can first be made in respect of employee wage costs during November, but there will be no gap in eligibility for support between the previously announced end-date of CJRS and this extension.

Which employees qualify for the extended job retention scheme?

Employees included on an employer’s PAYE records as at 23:59 30th October 2020 are eligible for claims under this extension.  In practice 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.  Anyone who was made redundant after 23rd September 2020 can be brought back on to the staff payroll and will qualify for furlough funding.  To qualify for furlough funding, an RTI submission must have been made for these re-employed workers between 20th March 2020 and  23rd September 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 must report hours worked and the usual hours an employee would work in a claim period.
  • Employers will need to pay their employees for the hours they actually work
  • Employers must still pay employer pension contributions and NICs on furlough pay and any other pay.

How do I claim?

    • Claims relating to November 2020 must be made by 14 December 2020.
    • Claims relating to each subsequent month should be submitted by day 14 of the following month, to ensure prompt claims following the end of the month which is the subject of the claim.
    • The closing date for claims up to and including 31 October remains 30 November 2020.

What about the Job Retention Bonus of £1,000 per employee?

The Job Retention Bonus will no longer be paid in Feb‌‌‌ruary 2021, as CJRS will still be available at that time.  An alternative retention incentive will be put in place at the appropriate time.

Public register of furlough employers

HMRC intend to publish details of employers who use the scheme for claim periods from December.  Employees will be able to find out if their employer has claimed for them under the scheme.

Website by Haiwyre