In a week that started with a perhaps not unexpected Government announcement introducing Lockdown II, things continued to move at a pace as Rishi Sunak announced details of a five-month extension to the current Coronavirus Job Retention Scheme.

The Self-Employment Income Support Scheme (SEISS) will also be increased, with the third grant covering November to January calculated at 80% of average trading profits, up to a maximum of £7,500.

 

  1. So What Is Changing With CJRS?
  • The Coronavirus Job Retention Scheme (CJRS) will now run until the end of March 2021, with employees receiving 80% of their current salary for hours not worked

https://www.gov.uk/government/publications/extension-to-the-coronavirus-job-retention-scheme/extension-of-the-coronavirus-job-retention-scheme

 

  1. What Has Changed Regarding CJRS?
  • Originally due to end on 31 October, the CJRS will now remain open until 31 March 2021;
  • This follows an announcement earlier in the week that the scheme had been extended to December 2020 following the announcement of a new national lockdown for England;
  • And then just a few hours later, the Chancellor justified the extension to CJRS by announcing that the clear economic effects of COVID-19 will be “much longer-lasting” for businesses than the duration of any current restrictions.
  • At this stage it seems that
    • For claim periods running “through to January 2021”, which we infer means at least to the end of December 2020 at least and most probably January 2021, employees will receive 80% of their usual salary while on furlough, subject to the original cap of £2,500;
    • Employers will be asked to continue to cover the costs of employer national insurance and pension contributions for hours not worked;
    • The CJRS extension will be reviewed in January 2020 to examine whether the economic circumstances are improving enough for employers to be asked to increase contributions;
    • HMRC will publish details of employers who make claims under the extended CJRS scheme, starting from December 2020.
  • Full guidance for the CJRS extension will be published on 10 November

 

  1. Am I Eligible To Use The New Coronavirus Job Retention Scheme?
  • Employers do not need to have used the CJRS previously;
  • You are eligible to claim irrespective of whether your business is open or closed

 

  1. Anything I Need To Keep Aware Of?
    • Employees will retain their rights at work, including SSP, annual leave, maternity and parental rights as well as a right to be paid at least the minimum wage for hours worked;
    • Employees cannot undertake any work for their employer during the hours that the employer records them as being on furlough;
    • Employers should discuss with their staff and make any changes to the employment contract by agreement; employment, equality and discrimination laws will apply in the usual way.
    • Employers must keep a written record of any agreement reached for 5 years as well as keep records of how many hours their employees work and the number of hours they are furloughed for 6 years
    • 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 as well as pay to HMRC the Employer National Insurance contributions.

 

  1. What Employees Are Covered?
  • Core Employees
    • Employers can claim for employees who were employed and on their PAYE payroll on 30 October 2020, where the individual appeared on an employer RTI claim between 20 March 2020 and 30 October 2020;
    • Employers have the 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
  • Employees Not Previously Claimed For Under CJRS
    • Employees do not need to have been furloughed under the CJRS previously;
  • Employees whose health has been affected by coronavirus or other conditions:
    • Employees can be furloughed where they are unable to work because they:
      1. are shielding in line with public health guidance (or need to stay at home with someone who is shielding)
      2. have caring responsibilities resulting from coronavirus, including employees that need to look after children
    • The CJRS is not intended for short-term sick absences;
      1. However, employers who want to furlough employees for business reasons and who are currently off sick can 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) although an employer can decide to keep the employee on furlough
  • 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;