On 5 November 2020, the Chancellor announced that the Coronavirus Job Retention Scheme (CJRS) had been extended for all parts
of the UK until 31 March 2021.
It will be reviewed in January. The CJRS was due to end on 31 October 2020, however it was initially extended until December due to the announcement that England would go into a full four-week lockdown.
Who is Eligible for Furloughing?
Anyone working in a full-time job (or on any PAYE basis) in October 2020 can be furloughed. That includes people working on zero-hour contracts and people on fixed-term/temporary contracts. To be eligible, the employer must also have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings and they must have a UK bank account.
How Much Will Each Employee Receive?
Under the extended CJRS, the furloughed employees will receive 80% of their usual wages for any hours not worked, up to a maximum of £2,500 per month. Employers are only required to pay National Insurance (NI) contributions and pension contributions but they can choose to “top up” employee wages at their own expense.
The previously announced Job Support Scheme (JSS) that was expected to apply from 1 November 2020 has now been postponed. Although many employers had already agreed to the JSS scheme, it is now expected that they move their employees from the temporary working agreement under JSS to the furlough scheme under CJRS. From the perspective of employers and employees, the furlough scheme is also more generous than the JSS scheme.
What is Furlough Pay Based?
Employer must include:
- Regular wages
- Overtime that has already been worked
- Compulsory commission payments
- Non-discretionary fees
- Piece rate payments
Employer must not include:
- Payments made at the discretion of the employer or a client i.e. tips
- Discretionary bonuses
- Non-Cash payments
- Non-monetary benefits such as benefits in kind (Company car)
- Salary sacrifice schemes (including pension contributions)
When Do I Need to Submit My Claim?
Claims may be submitted under the extended CJRS from 8 am on the 11 November 2020. All claims made for the November period must be submitted by no later than 14 December 2020. Claims relating to each subsequent month should be submitted by day 14 of the following months.
From December 2020, HMRC will publish details of all employers who made claims under the extended scheme.
Please contact us if you have any questions about the CJRS or need help with employment contracts.