Outlining the extension of the Job Retention Scheme

On 5 November, Chancellor Rishi Sunak extended the Coronavirus Job Retention Scheme (CJRS) until the end of March 2021. The CJRS was supposed to have ended after being scaled back to cover 60% of salaries during October. However, on 31 October Prime Minister Boris Johnson announced a new national lockdown for England that runs from 5 November until 1 December. Here, we consider the changes.

Extension of the CJRS

The extended CJRS applies to all of the UK. The scheme follows the flexibility of the CJRS and so can be used for employees for any work pattern, including full-time furlough. Employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. Employees will be paid for worked hours by their employer on the terms in their employment contract.

Under the scheme, employers can claim for the salary received by the employee for hours not worked. Employers will need to cover the employer Class 1 national insurance contributions (NICs) and employer pension contributions. There is no gap in support between the previously announced end date of the CJRS and the extended CJRS.

The government will review the amount of support given in January 2021 to decide whether economic circumstances are improving enough so that employers will need to make more contributions for hours not worked.

Eligibility

All employers with a UK bank account and a UK Pay as You Earn (PAYE) scheme can make a claim. Neither the employer nor the employee needs to have previously claimed or have been claimed for under the CJRS to make a claim under the extended CJRS.

An employer can claim for employees who were employed and on their PAYE payroll on 30 October 2020. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.

In addition, employees who have recently been made redundant or stopped working for the employer can be re-employed. The employees must have been employed and on the payroll on 23 September. The employer must have made an RTI submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.

Making a claim

The extended CJRS will operate as the previous scheme did, with businesses being able to claim either shortly before, during or after running payroll. Claims can be made from 8am on Wednesday 11 November.

Claims made for November must be submitted to HMRC by no later than 14 December 2020.

Claims relating to each subsequent month should be submitted by day 14 of the following month to ensure prompt claims following the end of the month which is the subject of the claim.

Job Support Scheme

As part of the Winter Economy Plan, Chancellor Rishi Sunak announced the introduction of the government's new Job Support Scheme (JSS). There have been two revisions to the plan since then. The JSS was due to be introduced from 1 November until 30 April 2021. The JSS may be introduced after March.

Please contact us if you have any queries on the extension of the CJRS.

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