Furlough 7.0

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Today the government announced that the Coronavirus Job Retention Scheme (CJRS) will continue until 31st March with grants covering 80% of wages. The planned replacement for this scheme – the Job Support Scheme (JSS) has been dropped as has the Job Retention Bonus Scheme. 

This change has been brought about by the lock down to be introduced from Thursday, 5 November. Many MPs felt that the JSS provided insufficient support during a lock down.  

The new national restrictions will apply from 5 November to 2 December 2020, but the financial support for employers applies from 1 November as the furlough scheme operates on full calendar months. 

What support is given under the CJRS? 

The CJRS will continue in force with the same conditions as applied in August 2020. 

The grant paid to employers CJRS grant will pay for 80% of the employee’s current wages for time not worked, up to £2,500 per month. The employer must pay for all the employer’s NIC and employer’s minimum workplace pension contributions on those wages. 

The employer can top-up the employee’s furlough pay at their own expense, if they wish to. 

Which employees qualify? 

Employees who were on the employer’s payroll on 30 October 2020 will qualify to be included in CJRS claim for November; they don’t have to have been included in an earlier CJRS claim. The employee must have been paid by the employer, and that pay must have been reported on a RTI return before midnight on 30 October. 

Employees on any type of contract can qualify, including zero hours, although more detail on whether contractors or directors are included is expected in the next few days.  

Flexi furlough 

Flexible furlough will be permitted alongside full-time furlough, so staff may be brought back part-time to say, set up the premises for the lifting of national restrictions, or to prepare for Brexit. 

The same rules for flexible furlough will continue to apply as they have done since 1 July, so the employee may be furloughed for a few days or hours per week. There appears to be no minimum time set for furloughed hours or working hours. 

However, each furlough claim must be for a period of at least seven consecutive calendar days. 

Which employers qualify? 

All employers with a UK bank account can claim support under the extended CJRS, there is no financial test to pass for larger employers as applies for the (now postponed) JSS. 

Charities and not-for-profit organisations can also claim in respect of their employees. However, public sector bodies and publicly funded organisations are not expected to use the scheme.  

How to claim? 

The claim process will be very similar to that which has applied so far under CJRS, the employer will have to report the hours the employee has not worked in a claim period, and the usual hours. 

It is not yet clear whether the employee’s pay must be reported on an RTI return before the CJRS grant is submitted for November pay periods. Further details and legislation are expected to be published shortly. 

Will the bonus return? 

The government will not now pay the Job Retention Bonus in February, having scrapped this.  

Instead, Rishi Sunak stated that it would ‘redeploy a retention incentive at the right time’. 

Extra support for the devolved nations 

The Chancellor also announced today an increase in the upfront guarantee of funding for the devolved administrations from £14 billion to £16 billion. This uplift will continue to support workers, business and individuals in Scotland, Wales and Northern Ireland. 

SRC-Time are one of the South East’s leading accountancy firms in advising the self-employed and partnerships in all aspects of their tax affairs and we are able to assist in any issue raised above. 

Our expert team is available to provide you with advice and can be contacted on 01273 326 556 or you can drop us an email at info@src-time.co.uk or speak with an account manager to get any process started. 

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