Coronavirus: Latest version of the Furlough Scheme

On 5 November, the Chancellor announced that the CJRS would be extended until the end of March 2021 for all parts of the UK. Employers want to know the details announced yesterday, as employees hope this will be enough to secure their jobs.

HMRC has circulated a short round-up explaining the impacts of this and where to find more information. The new and updated collection of advice notes can all be accessed from a single page:

What’s happening

CJRS has been extended to 31 March for all parts of the UK. From 1 November, the UK Government will pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month. Employers will continue to pay for hours worked as normal. The Government will review the policy in January.

Who is eligible

Employers and their employees do not need to have used the scheme before to claim for periods from 1 November. Employers can claim for employees who were employed on 30 October 2020, as long as a PAYE RTI submission was made to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.

Reference pay

All employees on an RTI submission on or before 19 March 2020 will be able to use the CJRS calculations as applied in August 2020 for reference pay and usual hours. For new employers claiming and new employees hired between 20 March 2020 and 30 October 2020, the average of tax year 2020 to 2021 up to the start of the furlough provides the basis for calculation (for fixed pay employees its the last pay period prior to 30 October 2020).

Legal matter

Employers should discuss with their staff and make any changes to the employment contract by agreement. To be eligible for the grant, employers must have confirmed to their employee in writing that they have been furloughed. Our clients can contact our office and we will provide you with a template agreement.

Compliance and monitoring

HMRC intend to publish details of employers who use the scheme for claim periods from December, and employees will be able to find out if their employer has claimed for them under the scheme.

Further updates

  • As a consequence, the Job Support Scheme will start on 1 April 2021 at the earliest
  • It also means that the £1,000 Job Retention Bonus will now not be paid in February 2021. The government said they will redeploy a retention incentive at the appropriate time.
  • The Self-Employment Income Support Scheme (SEISS) grant for November-January will cover 80% of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £7,500 in total. This is an increase from 55% and £5,160 respectively, previously announced.
  • As of 2 November, application deadlines have been extended until 31 January 2021 for the:
    • Bounce Back Loan Scheme
    • Coronavirus Business Interruption Loan Scheme
    • Coronavirus Large Business Interruption Loan Scheme
    • Future Fund
    • Covid Corporate Financing Facility

The extended generosity by the government comes at a cost. How precisely all of the various coronavirus schemes will be financed is highly uncertain.

Whether you’re an existing client or don’t yet use our services, we would be pleased to help you. Contact Mouktaris & Co Chartered Accountants for expert advice or click here to subscribe to our Newsletter.

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