Menu Search through site content Que cherchez-vous?
Menu

COVID-19: Furlough scheme extended to March 2021

  • Market Insight 6 novembre 2020 6 novembre 2020
  • Royaume-Uni & Europe

  • Coronavirus

On 5 November, the Chancellor, Rishi Sunak, announced that the Coronavirus Job Retention Scheme (also known as the furlough scheme) will be extended until 31 March 2021. The extended scheme, which will apply from 1 November, will be available to all qualifying employers in the UK, regardless of their size or location, and whether or not their business has been closed under national or local lockdown measures. For the time being, the previously announced Job Support Scheme and the Job Retention Bonus will not go ahead as planned but a retention incentive will be deployed at the appropriate time.

COVID-19: Furlough scheme extended to March 2021

Full guidance on the extended Coronavirus Job Retention Scheme (“extended CJRS”) will be published on 10 November but in the meantime, this is what we know from the HMRC Policy Paper and fact sheet published on 5 November:-

  • How the extended CJRS will work
    • Flexible furlough is allowed so employees will be able to do some part time work; full-time furlough is also allowed.
    • There is no minimum furlough period.
    • As with the previous CJRS, employees may not undertake any work for their employer during hours they are furloughed, but they may undertake training for their employer or volunteer for another organisation.
       
  • Eligibility
    • Employers can claim even if they, or any relevant employees, had not previously used the CJRS.
    • Employees eligible for the extended CJRS are:
      • those who were employed and on the employer’s PAYE payroll by 23.59 on 30 October 2020; and
      • those who were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer after that date and who are re-employed by their employer.
         
  • What the government will pay
    • For claim periods running to January 2021, employees will receive 80% of their usual salary for hours not worked, up to a cap of £2,500 per month (proportional to the hours not worked) – the government will review the extended CJRS in January 2021 to decide whether economic circumstances are improving enough to ask employers to increase contributions (as they have been required to do in September and October 2020).
       
  • Employer obligations
    • As previously under the CJRS from 1 August, employers must account for all employer National Insurance Contributions (NICs) and pension contributions on the full amount the employer pays the employee, including any scheme grant.
    • Employees must be paid full wages for any hours worked as normal.
    • As previously under the CJRS, employers can choose to top up employees' wages above the grant if they wish.
    • The grant must be paid to employees in full.
       
  • Calculating the grant for furloughed hours
    ​​Employers can claim the grant for the hours that their employees are not working calculated by reference to their usual pay and hours worked in a claim period:
    • For employees on a PAYE Real Time Information (RTI) submission on or before 19 March 2020, (ie those previously eligible for furlough) their reference pay and hours will be based on the furlough calculations as applied in August 2020.
    • For new employers claiming, and new employees hired between 20 March and 30 October 2020, they will have a different pay reference period, broadly based on:
      • For those on fixed wages - 80% of wages payable in the last pay period ending on or before 30 October 2020.
      • For those on variable wages – 80% of the average wages payable between the start date of their employment or 6 April 2020 (whichever is the later) and the day before their furlough period begins.
    • For employees who were not previously eligible under the previous CJRS, their usual hours will be:
      • For those on fixed wages where pay does not vary according to the number of hours worked – the contracted hours worked in the last pay period on or before 30 October 2020.
      • For those on variable hours - the average hours worked between the start date of the 2020/21 tax year and the day before furlough begins.
         
  • Employer–employee agreement
    • As with the original CJRS, the employer must have confirmed to their employee (or reached collective agreement with a trade union) in writing that they have been furloughed.
    • Where consistent with employment law, any flexible furlough or furlough agreement made retrospectively that has effect from 1 November 2020 will be valid for the purposes of a CJRS claim. However, only retrospective agreements put in place up to and including 13 November 2020 may be relied on for the purposes of a CJRS claim. This means that employers can backdate agreements and furlough an employee for any hours they have not worked. It will not be possible to claim the furlough grant in respect of hours actually worked during this time.
    • Employees can be furloughed if they are shielding in line with public health guidance (or need to stay at home with someone who is shielding) or if they have caring responsibilities resulting from coronavirus.
       
  • Claims:
    • When claiming the CJRS grant for furloughed hours, employers need to report and claim for a minimum period of seven consecutive calendar days.
    • Claims can be made from 8am on 11 November.
    • Claims for November must be submitted to HMRC by no later than 14 December 2020.
    • Claims for each subsequent month must be submitted by the 14th of the following month.

The government expects that publicly funded organisations will not use this extended CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted.

Details of all employers who make claims under the extended CJRS will be published, starting from December 2020.

The closing date for claims up to and including 31 October remains 30 November 2020

Fin

Restez à jour avec Clyde & Co

Inscrivez-vous pour recevoir nos mises à jour par courriel directement dans votre boite de réception!