1 November: The Coronavirus Job Retention Scheme (CJRS) has been extended until December, with furloughed employees to receive 80% of salary for hours not worked and businesses asked only to cover National Insurance and employer pension contributions.
In his announcement on 31 October of a new national lockdown for England from 5 November until 1 December, the Prime Minister confirmed that the CJRS has been extended for a further month.
The CJRS was due to have ended after being scaled back to cover 60% of salaries during October.
Details confirmed by the Chancellor reveal that the scheme will retain the flexible element, but the level of government support will return to the levels given in August. In this iteration, furloughed employees will receive 80% of their current salary for hours not worked, up to a maximum of £2,500.
Employers will be able to furlough employees full time or part time, but to be eligible for the grant an employee must have been on an RTI submission made to HMRC before 23.59 on 30 October 2020.
Employers will only be asked to cover employer national insurance and pension contributions for hours not worked. They will continue to pay for hours worked as normal. Employers can top up furloughed staff’s salary to the previously contracted amount if that is what has been agreed with the employee.
The statement from Treasury says: “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.”
ICAEW’s Tax Faculty says that the announcement raises a number of questions.
Businesses and their workers in Wales and Scotland which have already been in full lockdown for some weeks, will be wondering whether there will be any backdated additional support for them.
The systems and legal backing for this new scheme will need some revision and ICAEW will continue to work with HMRC and bring members more information as soon as we can.
In the meantime, the Tax Faculty advises all businesses using the CJRS to keep detailed records of workers’ pay and hours worked so that it will be easier to make the claims once the portal is available.
The statement from the HM Treasury and the Chancellor also confirmed that the Job Support Scheme (JSS) which had been due to launch on 1 November, will not start until the CJRS has closed.
The Job Support Scheme (JSS) will open on 1 November and run for six months, until 30 April 2021. The government has said it will review the terms of the scheme in January 2021. There are two variations to JSS – JSS Open and JSS Closed.
The UK government announced yesterday it will significantly increase the generosity and reach of its winter support schemes to ensure livelihoods and jobs across the UK continue to be protected in the difficult months to come, supporting jobs and helping to contain the virus.
In recognition of the challenging times ahead, the Chancellor said he would be increasing support through the existing Job Support and self-employed schemes.
JSS Open will provide support to businesses that are open where employees are working shorter hours due to reduced demand. Employees will need to work at least 20% of their usual hours. Employers will continue to pay employees for the hours they work, and the UK government will pay a contribution of 61.67% of the usual pay for hours not worked, up to a maximum of £1,541.75 per month. Employers will pay 5% of the usual pay for hours not worked, up to a maximum of £125 per month, and can top this up further if they choose. This means employees should receive at least two thirds of their usual pay for hours not worked.
The caps are reduced according to the proportion of hours not worked. Further guidance on this will be available on GOV.UK shortly.
Employers will need to cover all employer National Insurance and pension contributions.
JSS Closed will provide support to businesses whose premises are legally required to close as a direct result of coronavirus restrictions set by one of the four governments of the UK. This includes premises restricted to delivery or collection-only services from their premises, and those restricted to providing food and/or drinks outdoors.
For JSS Closed, the UK government will fund two thirds of employees’ usual wages for time not worked, up to a maximum of £2,083.33 per month. Employers will not be required to contribute, but they can top up the government’s contribution if they choose to. Employers will still need to cover all employer National Insurance and pension contributions.
You or your clients will be able to make your first JSS claim in arrears from 8 December, for pay periods ending and paid in November. We’ll let you know more about how to make a claim by the end of this month.
Employees will be able to check if their employer has made a Job Support Scheme claim on their behalf through their online Personal Tax Account. Employees can set up a Personal Tax Account on GOV.UK, by searching ‘Personal Tax Account: sign in or set up’.
Self-Employment Income Support Scheme (SEISS) Grant Extension
As part of support for businesses through the coronavirus pandemic, the UK government has increased the support available under the SEISS Grant Extension – doubling the value of the first grant.
This brings support for the self-employed in line with that for employers under the Job Support Scheme Open.
The value of the first SEISS Grant Extension, covering the period November 2020 to the end of January 2021, will double. This means that the UK government will provide an initial SEISS grant based on 40% of three months’ average trading profits, paid out in a single instalment, and capped at £3,750 in total.
To ensure that support will be targeted to those who most need it, SEISS Grant Extension will be available to self-employed individuals who temporarily cannot trade as well as those continuing to trade and facing reduced demand due to COVID-19.
HMRC will provide full details about claiming and applications in guidance on GOV.UK in mid-November.
Job Retention Bonus (JRB)
You or your clients will be able to claim a one-off payment of £1,000 for every eligible employee you furloughed and claimed for through the Coronavirus Job Retention Scheme (CJRS), kept continuously employed until at least 31 January 2021 and who meets the other eligibility criteria. Employers do not have to pay this money to their employee.
You or your clients will be able to claim the bonus between 15 February and 31 March. To do this you must have submitted PAYE information for the period up to 5 February 2021 on time.
Further information on eligibility and when you can claim can be found on GOV.UK by searching ‘Job Retention Bonus Guidance’ and further guidance on the claim process will be published by the end of January 2021.
Coronavirus Job Retention Scheme – closes on 31 October
Please note that this scheme closes on 31 October and employers will need to make any final claims on or before 30 November. Employers will not be able to submit or add to any claims after 30 November.
From 1 October, the UK government has paid employers 60% of usual wages up to a cap of £1,875 per month for the hours furloughed employees do not work.
You or your clients will continue to pay your furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. Employers need to fund the difference between this and the CJRS grant themselves.
The caps are proportional to the hours not worked. For example, if an employee is furloughed for half their usual hours in October, employers are entitled to claim 60% of their usual wages for the hours they do not work, up to £937.50 (half of £1,875 cap). Employers must still pay their employee at least 80% of their usual wages for the hours they don’t work, so for someone only working half their usual hours they’d need to pay them up to £1,250 (half of £2,500 cap), funding the remaining portion themselves. For help with calculations, search ‘Calculate how much you can claim using the Coronavirus Job Retention Scheme’ on GOV.UK.
Employers will also continue to pay employer National Insurance and pension contributions from their own funds.
Employers must keep the records that support the amount of CJRS grant they have claimed in case HMRC needs to check it. Employers can now view, print or download copies of their previously submitted claims by logging onto their CJRS service on GOV.UK.
Please follow the ICAEW link below for latest advice on Job Retention scheme:
HMRC – Link to support for business:
Business grants/rates: (East Devon is used as an example – check with your own rating authority)