The UK’s Coronavirus Job Retention Scheme (CJRS) was due to end on 31 October 2020 with the replacement Job Support Scheme (JSS) set to launch on 1 November. In a last-minute change of plan, the Treasury has announced that the more generous CJRS will be extended, at least for now, to provide support to businesses and employees during the new national lockdown in England.
The government published its latest guidance note on 10 November and it largely aligns with the scheme terms in place from 1 March to 31 October, although there are some key changes to note.
- Key changes from 1 November 2020
The extended CJRS mirrors the level of support available to employers under the Original CJRS. Much of the technical detail in the updated guidance remains unchanged from the previous version, but there are a few changes including:
- To make use of the scheme, neither the employer nor the employee needs to have previously used the Original CJRS. This is a significant change to the previous position where employees needed to have been on furlough for three consecutive weeks ending on or before 30 June to allow continued used of the scheme from July to the end of October.
- There is no limit to the number of employees that an employer can claim. Under the Original CJRS, a cap was imposed which meant employers could not claim for more people than they had furloughed previously.
- Employers will not be able to claim for furloughed employees who are serving a contractual or statutory notice on or after 1 December 2020. PILON payments and statutory or enhanced redundancy payments are already outside the scope of the scheme. It seems that employees with notice periods during the month of November will be covered. However, for claims starting on or after 1 December, an employer cannot claim for any days during which the employee is serving a contractual or statutory notice period from 1 December onwards.
- Rather alarmingly, the guidance states that, from December 2020, HMRC will publish employer names and for companies and Limited Liability Partnerships (LLPs), the company registration number of those who have made claims under the scheme for the month of December onwards.
- Claims relating to November 2020 must be made by 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. The closing date for claims up to and including 31 October remains 30 November 2020. HMRC might accept a claim made after the relevant deadline if the employer has a reasonable excuse for failing to claim on time. Note that HMRC will not consider any reasonable excuse in advance of the deadline. A useful table detailing the deadlines can be found in the Claim for wages guidance.
- More of the same?
The workings of the CJRS Extension remain largely the same as the Original CJRS and the key points include:
- The level of support available to employers operates in the same way as before. The government will pay up to 80% of a usual salary for hours not worked up to a cap of £2,500 per month. Any hours worked should be paid in the usual way. Employers will be responsible for National Insurance and pension contributions. Employers can choose to top up wages, although they are not obliged to do so.
- Employers can claim for employees who were employed on 30 October 2020, as long as they have made a PAYE RTI submission to HMRC between the 20 March and 30 October 2020, notifying a payment of earnings for that employee.
- Employers can bring back employees on a part-time basis and claim flexible furlough. As before, the employer will cover the cost in full for any hours worked by furloughed employees and can claim a furlough grant for those hours not worked.
- The guidance makes clear that employers can furlough employees who are unable to work because they are clinically extremely vulnerable or have caring responsibilities resulting from coronavirus, including employees that need to look after children.
- Beware: errors
There are a number of apparent errors and inconsistencies in the drafting of the guidance some of which have now been amended within 48 hours of it being published. The key errors include:
- Employers can claim for employees of a previous business transferred as long as the TUPE or PAYE business succession rules apply to the change in ownership. The initial guidance stated that the employees who TUPE into a business must have “been employed by their prior employer on or before 30 October 2020 and transferred from them to their new employer on or before 1 September 2020”. This error has now been corrected and the guidance states, “been employed by their prior employer on or before 30 October 2020 and transferred from them to their new employer on or after 1 September 2020”.
- The guidance states that sick furloughed employees can continue to be furloughed as long as they were placed on furlough before 30 June and a claim was submitted by 31 July 2020. There is no requirement otherwise under the extended CJRS for employees to have been previously furloughed and it is thought the wording in relation to sick employees has been included by error.
Links to the latest guidance can be found here.