Coronavirus Job Retention & Job Support schemes

We are gathering information on the Coronavirus Job Retention Scheme (CJRS) and the Job Support Schemes, updating this page as it is released from the government. The latest announcements are also covered in our blogs. 

Update 5 November: Coronavirus Job Retention Scheme extended until March 2021 & Job Suport Scheme postponed

The Chancellor has announced today that the furlough or Coronavirus Job Retention Scheme will be extended until the end of March 2021 with employees receiving 80% of their current salary for hours not worked. Employers will only be asked to cover National Insurance and employer pension contributions for hours not worked.

The government’s economic support factsheet goes on to explain:

  • Businesses have the flexibility to use the scheme for any amount of time and shift pattern, including furloughing them fulltime
  • No employer’s contribution is required to wages for hours not worked. They are asked to cover Employer National Insurance and Employer pension contributions only at this time, subject to review in January
  • Businesses can claim either shortly before, during or after running payroll. Claims can be made from 8am Wednesday 11 November and be submitted by 14 December
  • Neither employer or employee needs to have previously claimed or have been claimed for under CJRS. An employer can claim for employees who were employed and on their payroll on 30 October. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 30 march and 30 October 2020
  • Employees that were employed and on payroll on 23 September 2020 who were made redundant or stopped working afterwards can be re-employed and claimed for. The employee must have been included on an PAYE RTI submission form 20 March to 23 September.

It is worth noting that, because of the extension to the CJRS, the Job Retention Bonus will not be paid in February. An alternative retention incentive will be considered instead.

Update 31 October: National lockdown and extension to Coronavirus Job Retention Scheme

Following the Prime Minister’s announcement of a national lockdown effective from 5 November, the Coronavirus Job Retention Scheme (CJRS) has been extended.

The main points are summarised below:

Coronavirus Job Retention Scheme

The Coronavirus Job Retention Scheme, due to close on 31 October, will remain open until December.

Employees will receive 80% of their current salary for hours not worked, up to a maximum of £2,500. The government’s contribution will be greater than it was in October. It will pay 80% of wages up to the cap, for hours not worked with employers only asked to pay National Insurance Contributions (NICs) and pension contributions, as they did in August.

Importantly, unlike August, flexible furloughing will be allowed in addition to full time furloughing.

Further details of how to claim under the extended scheme are expected shortly, but there will be no gap in eligibility for support between the original CJRS end date of 31 October and this extension period.

We will provide further details as soon as we have them.

The Job Support Scheme, which was scheduled to take effect from Sunday 1 November, has been postponed until the furlough scheme ends.

Extended Job Support Scheme – Job Support Scheme – “Closed” – postponed as of 5 Nov

Following government announcements on the  8 October,  further support measures aimed at protecting jobs and supporting businesses through the pandemic were outlined. The Chancellor made further announcements regarding the JSS on 22 October, but we understand that the scheme for businesses legally required to close remain unchanged.

If you are legally required to close the doors of your business as a result of national or local coronavirus restrictions for some period over the winteryou will receive grants to help to pay the wages of staff who cannot work.

The key elements of the Job Support Scheme Close are:

  • The government will support eligible businesses by paying two thirds of each employees salary up to a maximum of £2,100 a month. Employers will not be required to contribute towards wages, but will be asked to cover National Insurance and pension contributions. 
  • The grant can only be claimed while the business is subject to restrictions and employees must be off work for a minimum of seven consecutive days. 
  • The scheme begins on 1 November and will be available for six months, reviewed in January 2021. 
  • Payments will be made in arrears, via an HMRC claims service available in early December. (Employees of firms that have been legally closed in the period before 1 November are eligible for the Coronavirus Job Retention Scheme.) 

Government Factsheet: Job Support Scheme Expansion for Closed Business Premises 

The Job Support Scheme – “Open” – postponed as of 5 Nov

On the 22 October, the Chancellor announced changes to the Job Support Scheme for businesses adversely affected over Winter by Covid-19 restrictions. They have been enhanced, particularly to help those in Tier 2 High Alert level areas.

The key elements of the Job Support Scheme Open are:

  • The JSS will support viable jobs – employees must work at least a 20% of their normal hours and be paid for that work as normal by their employer. The government, together with their employer will then increase those people wages, covering 2/3 of the pay they have lost as a result of reducing their hours, capped at £1541.75 per month and the employee will keep their job. In the changes announced on the 22 October, the employer must now cover 5% of the wages for hours not worked, rather than 33% as originally announced when the scheme was launched.
  • All SMEs are eligible. Larger business will only be eligible when their turnover has fallen as a result of the crisis.
  • The JSS will be open to all employers across the UK even if they have not previously used the furlough scheme. The Scheme will run for 6 months from November and employers retaining furloughed staff on shorter hours can claim both the Job Support Scheme and the Job Retention Bonus.

Government factsheet for Job Support Scheme Open available here.

Changes to the CJRS from 1 July

The staged way in which the government is changing the support given to employers through the furlough scheme, means that there are necessary rule changes regarding CJRS claims.

Important cut off dates

The CJRS scheme will end on 31 October. All claims must be submitted no later than the 30 November 2020.

Claims within the calendar month

Claim periods starting on or after 1 July must start and end within the same month and must cover at least 7 days, unless you are claiming for the first or last few days in a month and you have already claimed for the period ending immediately before it.

You can only make one claim for any period, so make sure you include all furloughed or flexibly furloughed employees in one claim, even if you pay them at different times. Claims cannot overlap, and must be continuous with no gaps in dates.

You can usually make your claim up to 14 days before the end of your claim period and you do not have to wait until the end of a claim period to make your next claim.

Record hours worked

Flexible furlough claims must contain details of usual hours, usual hours worked, and hours furloughed. The furlough period can vary from day to day or week to week, but accurate records – in hours – must be maintained. You should not claim until you are sure about the numbers of hours employees are working during the claim period. If you overclaim, you will have to repay HMRC.

HMRC has issues guidance and examples on claim periods, calculating wages and usual v furloughed hours.

Maximum number of furloughed employees

You cannot claim for more employees in periods starting after 1 July, than the maximum you have claimed for under any period up to 30 June. This may differ where you have an employee returning from statutory parental leave.

 

CJRS Scheme overview

Updated 1 October 2020 

If Covid-19 has affected your business, you can furlough employees and apply for a grant to cover a portion of their usual monthly wage costs, where you record them as being on furlough. Until 30 June, employees had to be fully furloughed for a minimum period of 21 days with no work allowed.

From 1 July furloughed employees could be brought back for any amount of time or work pattern, while still being able to claim for hours not worked. There is no minimum furlough period. This is the concept of flexible furloughing. It is only  available for employees that have been furloughed for at least three weeks between 1 March and 30 June. This may differ if you have an employee returning from parental leave or who is a military reservist.

Through August, September and October, employers have been asked to contribute an icreasing amount towards the cost of furloughed employees’ wages, paying Employer National Insurance Contributions and pension contributions and topping up employees’ wages to ensure furloughed employees receive 80% of their wages, up to a cap of £2,500 per month for the time they are being furloughed. 

The CJRS scheme ends on 31 October and all claims must be submitted no later than 30 November.

What can you claim?

Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours:

  • There are no changes to grant levels in June.
  • For June and July, the government will pay 80% of wages up to a cap of £2,500 for the hours the employee is on furlough, as well as employer National Insurance Contributions (ER NICS) and pension contributions for the hours the employee is on furlough. Employers will have to pay employees for the hours they work.
  • For August, the government will pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough and employers will pay ER NICs and pension contributions for the hours the employee is on furlough.
  • For September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
  • For October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.

Who can you claim FOR?

From 1 July, only employees that you have successfully claimed a previous CJRS grant for will be eligible for further grants under the scheme. That means they must have been furloughed for at least 3 consecutive weeks between 1 March and 30 June and you must have submitted your claim for this before 31 July.

You cannot claim for more employees in periods starting after 1 July, than the maximum you have claimed for under any period up to 30 June. This may differ where you have an employee returning from statutory parental leave.

As well as employees, the CJRS grant can be claimed for any of the following, if they are paid via PAYE:

  • Office holders – including salaried company directors and directors of their own personal service company
  • Salaried members of Limited Liability partnerships
  • Agency workers
  • Limb (b) workers
  • Contingent workers in the public sector
  • Contractors with public sector engagements in scope of IR35 off-payroll working rules

Full government guidance on who you can claim for can be found here.

Calculating your claim

The government provides detailed guidance on this. In line with the scheme’s changes, employers will be asked to contribute to the costs of furloughed employees’ wages to ensure that they continue to receive at least 80% of their wages for the time they are on furlough. It is important that you keep records of the following for at least 6 years:

  • the amount claimed and claim period for each employee
  • the claim reference number for your records
  • your calculations in case HMRC need more information about your claim
  • usual hours worked, including any calculations that were required, for employees you flexibly furloughed
  • actual hours worked for employees you flexibly furloughed

The calculations can be onerous, and they will become more complex with the introduction of flexible furloughing. Our team have been successfully advising and implementing furloughing schemes for our clients as well as calculating and submitting their claims.

If you plan to make your own claim, you will need:

(Full Government guidance)

  • to be registered for PAYE online
  • your UK bank account number and sort code (only provide bank account details where a BACS payment can be accepted)
  • the billing address on your bank account (this is the address on your bank statements)
  • your employer PAYE scheme reference number
  • the number of employees being furloughed
  • each employee’s National Insurance number (you will need to search for their number if you do not have it or contact HMRC if your employee does not have a number)
  • each employee’s payroll or employee number (optional)
  • the start date and end date of the claim
  • the full amounts that you’re claiming for including:
    • employee wages
    • employer National Insurance contributions (for claims up to 31 July)
    • employer minimum pension contributions (for claims up to 31 July)
  • your phone number
  • contact name

You also need to provide either:

  • your name (or the employer’s name if you’re an agent)
  • your Corporation Tax unique taxpayer reference
  • your Self-Assessment unique taxpayer reference
  • your company registration number

If you’re claiming for employees who are flexibly furloughed, you’ll need to have agreed the furlough arrangement with the employee (or reached a collective agreement with a trade union) and keep a written agreement that confirms the furlough arrangement.

For the claim period you’ll also need:

  • the number of usual hours your employee would work in the claim period
  • the number of hours your employee has or will work in the claim period
  • you will also need to keep a record of the number of furloughed hours your employee has been furloughed in the claim period

 

 

 reference documents and useful links:

Changes to furlough scheme

Employers to share costs of Coronavirus Job Retention Scheme and SEISS extended

Update 20 April 2020 Bates Weston Blog on making a claim under CJRS

Update 16 April 2020 Treasury Direction clarifies Coronavirus Job Retention Scheme

Support for businesses through the Coronavirus Job Retention Scheme

Claim for your employees’ wages through the Coronavirus Job Retention Scheme

The Coronavirus Job Retention Scheme: furlough guidance from the ICAEW

 

 

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