Business Services
2nd November 2020

Furlough scheme extended

Hours before it was due to end, the Prime Minister announced on Saturday that the government’s Coronavirus Job Retention Scheme (CJRS) would be extended, as a further lockdown in England was confirmed.

Also known as the ‘furlough scheme’, the CJRS will now 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 cost for employers of retaining workers will be reduced compared to the current scheme, which ended on 31 October. This means the extended furlough scheme is more generous for employers than it was in October.

In addition, business premises forced to close in England are to receive grants worth up to £3,000 per month under the Local Restrictions Support Grant. £1.1bn is also being given to Local Authorities, distributed on the basis of £20 per head, for one-off payments to enable them to support businesses more broadly.

Coronavirus Job Retention Scheme

Employers small or large, charitable or non-profit, are eligible for the extended CJRS, which will continue for a further month.

Businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time, and will only be asked to cover National Insurance and employer pension contributions which, for the average claim accounts for just 5% of total employment costs.

To be eligible for this extension, employees must have been on the payroll by 30 October 2020, but they do not need to have been furloughed before.

The Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends.

Mortgage Holidays

Mortgage payment holidays have also been extended. Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.

The FCA are planning to announce further information today.

Business Grants

Businesses required to close in England due to local or national restrictions will be eligible for the following:

• For properties with a rateable value of £15k or under, grants to be £1,334 per month or £667 per two weeks;

• For properties with a rateable value of between £15k-£51k grants to be £2,000 per month or £1,000 per two weeks;

• For properties with a rateable value of £51k or over grants to be £3,000 per month or £1,500 per two weeks.

Who is eligible for the CJRS?

Employers

• 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 government expects that publicly funded organisations will not use the scheme, as has already been the case for CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted. All other eligibility requirements apply to these employers.

Employees

To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30 October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30 October 2020.
In addition, as under the current CJRS rules:

• Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees.

• 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. Such calculations will broadly follow the same methodology as currently under the CJRS.

• When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days.

• Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.

• For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.

What support is being provided and employer costs:

• For hours not worked by the employee, the government will pay 80% of wages up to a cap of £2,500. The grant must be paid to the employee in full.

• Employers will pay employer NICs and pension contributions, and should continue to pay the employee for hours worked in the normal way.

• As with the current CJRS, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.

• 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.

If you would like further help or advice please contact us.