Job Retention (aka Furlough) Scheme Extended to March 2021
Posted on 1st November 2020 at 18:43
On Saturday 31 October the UK Government announced in line with the latest Covid-19 National Lockdown an extension of the Coronavirus Job Retention Scheme (CJRS) - also known as the Furlough Scheme.
Today, 05 November the chancellor Rishi Sunak has confirmed that he government is extending until the end of March the payment of furlough worth 80 per cent of salary for employees unable to work because of companies being closed by coronavirus regulations.
An income support grant for self-employed people, covering the period November to January, will also increase from the planned 55 per cent to 80 per cent of average profits up to £7,500.
Mr Sunak confirmed that the support will be provided to all four nations of the United Kingdom equally throughout the period.
Employers small or large, charitable or non-profit, are eligible for the extended Coronavirus Job Retention Scheme (CJRS), which was due to end on 31 October, will now be extended, with the UK government paying 80% of wages for the hours furloughed employees do not work, up to a cap of £2,500 for periods from 1 November.
You will need to pay all employer National Insurance Contributions (NICs) and pension contributions. You can choose to top up your furloughed employees’ wages beyond the 80% paid by the UK government for hours not worked, but you are not required to do so. There will be no gap in support between the previously announced end date of CJRS and this extension.
Which employees are eligible for this Furlough Extension?
You can claim for employees who were on your PAYE payroll on 30 October 2020. You 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.
If employees were on your payroll on 23 September 2020 (i.e. notified to HMRC on an RTI submission on or before 23 September) and were made redundant or stopped working for you afterwards, they can also qualify for the scheme if you re-employ them.
Neither you nor your employee needs to have previously used the CJRS.
Further details on eligibility will be provided in the next few days. As ever, we are awaiting further guidance from the government, but our advice is that employers need to move quickly and ensure that employees are furloughed as soon as possible to take advantage of this extended Scheme.
What do I need to do now?
• Check if your employees are eligible for the scheme, based on the information above.
• Agree working hours with your employees, so they know if they are furloughed fully or part-time during November.
Remember that you need consent of employees to place them on Furlough. We will happily provide letters if you need them and you may be able to adapt ones you already have.
How do I claim?
While the government updates the system, employers will submit their wage claim to the government, and be refunded afterwards. After that, they will be paid upfront to cover the cost.
Employers also need to keep copies of records for 6 years including 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 of employees who were flexibly furloughed, including any calculations that were required and actual hours worked; inform employees that you have made a claim and that they do not need to take any more action; and pay employees their wages (the full amount claimed). More details on how to claim here
We await confirmation on:
Whether you can place employees on notice whilst furloughed - we think you can but are awaiting confirmation.
Further Changes announced today 05 November: :£1,000 for every furloughed employee kept on until at least the end of January - this incentive has been postponed as of 05 November 2020
For further support and guidance on making Covid-19 related changes within your workforce, please contact firstname.lastname@example.org or your Humber HR People consultant.
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