Furlough scheme updated – Nov 2020

Following the latest lockdown announcement, we wanted to give you a quick update. In the measures outlined on Saturday, it was confirmed that the Coronavirus Job Retention Scheme (CJRS) – also known as the Furlough scheme – will remain open until December, with employees receiving 80% of their current salary for hours not worked, up to a maximum of £2,500. Under the extended scheme, the benefits will return to the same levels as August. The Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends.

Scheme outline:

• Employers small or large, charitable or non-profit, are eligible for the extended CJRS, which will continue for a further month until December
• Employees receive 80% of their current salary for hours not worked (capped at £2,500 a month)
• As under the current CJRS, flexible furloughing will be allowed in addition to full-time furloughing
• Employers will pay Employer NI and Employer pension contributions and the grant must be paid to the employees in full

Who is eligible?

Companies

• All employers with a UK bank account and UK PAYE scheme
• Neither the employer nor the employee needs to have previously used the CJRS
• Publicly funded organisations should not use the scheme. However, partially publicly funded organisations may be eligible (this is in the case where private revenues have been disturbed)

Employees

• Employees must be on an employer’s PAYE payroll by 23:59 30th October (Friday). A RTI submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020
• 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.
• When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days.

When can I claim?
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.

As has been the case since March, this is a movable feast and we will update you with any changes to legislation as and when it comes in, but please don’t hesitate to get in touch if you need any support or clarification.

Further detail added 10th November:

1. The names of the those employers using the scheme from December will be made public by HMRC. We are not entirely sure of the rationale here – perhaps to ‘shame’ and discourage companies using the scheme, encourage whistleblowers, impact on credit scores?

2. The Job Retention Bonus, due to be paid in Feb, will now be pushed back until further notice as a result of the scheme extension (which makes sense but worth re-iterating in case you’ve built it into cash flows projections)

Action required: Make sure you are complying with the rules for the furlough scheme – if you’re not then act now. Update projections/forecasts as a result of the changes.

Further detail can be found here:

https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme#employer-claim-information-hmrc-will-make-public