November 2, 2020

Coronavirus Job Retention Scheme (Furlough Scheme) Extended

Specialist employment lawyer, David Dixey, discusses the recent announcement regarding the extension of the CJRS (Furlough) Scheme.

The Prime Minister’s announcement, made on 31st October 2020, that England will be placed into a second lockdown from Thursday 5th November is obviously a blow to businesses and employers; many of whom will still be recovering from the first lockdown and the reduced trading that has ensued since in some sectors. The Coronavirus Job Retention Scheme (CJRS), which was due to be replaced by the less generous Job Support Scheme (JSS) on 1st November 2020, has now been extended to run until at least early December. The JSS has been postponed until the “Furlough” Scheme ends.

Details of the Furlough Scheme from 1st November 2020

As with the original Scheme, the extended CJRS will be available to all employers large or small, charitable or non-profit. The ability to place employees on flexible Furlough will continue and employers will be able to Furlough employees even if the employer has not previously used the Scheme or the employee has not previously been Furloughed.

The extended CJRS is more favourable to employers;

  • Employees will still receive 80% of their current salary for hours not worked, up to a maximum of £2,500;
  • But the cost for employers of retaining workers will be reduced; employers will only be asked to cover National Insurance and employer pension contributions.

It is understood the extended Scheme will operate as the previous Scheme did, with businesses being paid up front to cover wages costs. However, there may be a short period at the outset when HMRC will pay in arrears while they update their systems following the announcement of the second lockdown.

Restriction

To be eligible to be claimed for under this extension, employees must be on the employers PAYE payroll by 23:59 hours 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.

Apart from the changes highlighted above, the rules governing the extended Scheme are identical to the original CJRS.

Detailed Government and HMRC guidance is being formulated. When available, we will prepare a further article highlighting any new information or changes.

Expert Employment Law Advice

Call 01206 593933 and speak to David Dixey, Employment Law specialist.
Or send an email
Key Contact

David Dixey

Employment Law Specialist

dd@holmes-hills.co.uk

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