Trick or Treat - Coronavirus Job Retention Scheme to be extended following Government lockdown announcement

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Article

03 November, 2020

The Coronavirus Job Retention Scheme (CJRS), also known as the furlough scheme, has been extended following the Prime Minister's announcement on Saturday 31 October that England was due to enter into a second national lockdown as of Thursday, 5 November 2020.

During the lockdown period, non-essential retail, leisure and hospitality businesses have been ordered to close, much like the nationwide lockdown in March, albeit Schools and Universities will remain open. To alleviate the financial impact of the lockdown on businesses and again, with a view to retaining as many jobs as possible, the Government have agreed to extend the CJRS, rather than to implement the Job Support Scheme (JSS), which was due to supersede CJRS on 1 November 2020.This is welcomed news for most employers since the terms of the CJRS are more favourable than the JSS.

In terms of eligibility, it is currently understood that all employers with a UK bank account and UK PAYE schemes can claim the grant and neither the employer nor the employee needs to have previously used the CJRS. Employees must also be on an employer's PAYE payroll by 23:59 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020. Employees can be on any type of contract and employers will be able to agree any working arrangements with employees.

The CJRS has been extended provisionally until 2 December 2020 and will allow employers to furlough employees on both a full-time and part-time basis, also known as "flexible furlough". Further details including how to claim this extended support through an updated claim service is expected shortly. The level of the grant will mirror levels available under the CJRS in August, so the government will pay 80% of wages up to a cap of £2,500 and employers will pay employer National Insurance Contributions (NICs) and Pension Contributions for any furloughed hours that the employee would otherwise usually work.

As a result of this extension, it has been confirmed that the JSS will be postponed until the CJRS ceases in December. However, it is possible that the CJRS may be extended even further in line with any extensions to the nationwide lockdown.

The Government is due to announce further details regarding the extended Scheme, prior to the lockdown in England beginning on 4 November 2020, meaning employers will need to keep a close eye out in the coming days on any changes being announced. We would recommend that employers ensure that they re-enter into agreements with those who are not currently on furlough, to ensure that they are able to evidence their claims to HMRC and to retain those records for six years, as stated previously in the guidance.

As before, it is understood that publicly funded organisations will not seek to benefit from the Scheme.

For more information contact Emma Swan in our Employment & HR department via email or phone on 0333 207 1154. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

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