Coronavirus Job Retention Scheme
17 December 2020 Update: Chancellor Rishi Sunak has confirmed that the Coronavirus Job Retention Scheme (CJRS) will continue in its current format (previously detailed below) until 30 April 2021. Employees will continue to receive 80% of their current salary for hours not worked, up to a maximum of £2,500 and businesses will only be asked to cover National Insurance and employer pension contributions.
The Coronavirus Job Retention Scheme (CJRS) commonly known as the furlough scheme will be extended until the 31 March 2021. The most recent update (further extending the life of the scheme) was announced by the Chancellor Rishi Sunak when delivering his fourth Winter Economic Plan to the House of Commons on 5 November 2020.
The Chancellor confirmed that employees will receive up to 80% of their salary for hours not worked. There will be a review date of the CJRS in January 2021 which may see employers taking on an increased financial contribution if the economic and health outlook of the country show signs of improvement.
It had been announced that the CJRS would be replaced by the Job Support Scheme (JSS), a scheme that would have topped up wages for people returning to work on reduced hours. The introduction of the JSS has now been put on hold.
A bullet-point summary of the main details of the CJRS extension announced is set out below:
• People who are unable to work will receive up to 80% of their wages. This payment is subject to a monthly maximum of £2,500 per employee (for hours not worked). Employers will have the discretion to top-up the payments if they so wish.
• The scheme will apply across the UK, in England, Wales, Scotland and Northern Ireland even where the regions are subject to different lockdown restrictions.
• Employers will be required to pay employer NICs and pension contributions for their employees whilst on furlough.
• Flexible furloughing, whereby employers can bring back employees to work part-time will be allowed. Employers will have to pay employees for the hours they work but can still use the scheme to cover any normal hours where employees are furloughed.
• To be eligible, employees must have been registered on their employers PAYE payroll by 23:59 on 30 October 2020. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
• Employees employed as of 23 September 2020 and on payroll, who were made redundant or stopped working for the employer afterwards can also qualify for the scheme if they are re-employed and placed on furlough.
• 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.
• The first claims under the extended CJRS can be made from 8am on Wednesday 11 November. Claims for November must be submitted to HMRC no later than 14 December 2020.
• There will be no gap in eligibility between the previously announced end date of the scheme on 31 October 2020 and this extension.