The Coronavirus Job Retention Scheme (CJRS) (or the furlough scheme as we know it) has been extended further from 1 November 2020 until 31 March 2021. HMRC’s guidance for employers on the CJRS and guidance for employees has been updated to reflect the rules for the extended scheme period. The government has also published a policy paper which applies for CJRS claims for the period starting on or after 1 November 2020 to 31 January 2021.
In addition on 13 November HM Treasury published a new Treasury Direction under the Coronavirus Act 2020. This sets out the legal framework for the scheme from 1 November 2020 to 31 January 2021.
Set out below are the key provisions of the extended scheme:
- The government will pay up to 80% of an employee’s normal pay, up to a cap of £2,500 a month (employers can choose to top up employee wages if they wish). Employers will remain responsible for National Insurance contributions and pension contributions.
- The CJRS will be reviewed in January 2021 to see if economic circumstances have improved enough to ask employers to contribute more. This could result in the 80% government contribution not lasting for the duration of the extension.
- Employees can either be put on furlough on a full-time basis, or on a part-time basis (i.e. flexible furloughing).
- Employers can claim under the scheme even if they have never used the CJRS before or have not furloughed the employees before, and there is no limit on the number of employees who can be furloughed.
- Employers can claim for employees employed on 30 October 2020, provided a RTI PAYE return had been made for them by that date (extending the class of employees eligible – employers might be able to furlough recent joiners who were previously not eligible).
- There is a different rule if employers want to re-hire an ex-employee and furlough them. Employers can, if they wish to (but are not obliged), re-employ anyone made redundant and furlough them provided they were still employed and were on payroll on 23 September 2020. Employees on fixed-term contracts that have expired since 23 September can also be re-employed and claimed for.
- Although the process for making a furlough claim is the same, there is a shorter claim window. Claims relating to November 2020 should be made by 14 December 2020. Claims relating to each subsequent month should be submitted by day 14 of the following month.
- Employees returning from maternity leave need to give the statutory eight weeks' notice to end maternity leave early in order to be furloughed (and get furlough pay, typically higher than SMP). The Guidance does not deal with the issue of the employee and employer who agree to shorten that eight-week period.
- It is a condition of making a claim that the employer accepts that HMRC will publish information about CJRS claims on the internet. This includes the name of the employer and a “reasonable indication” of the amount claimed.
- Furlough agreements must be in place before the start of the relevant claim period, but may be varied during the course of the claim period. In our view it will be sufficient to update an earlier furlough agreement so long as it is done before the employee is furloughed.
- The Job Retention Bonus, which was due to be paid out to employers for employees retained after furlough until the end of January, has been withdrawn.
- The Job Support Scheme which is the scheme the government had intended to replace the furlough scheme with has been postponed.
- Crucially claims may not be made for any day that an employee is serving notice between 1 December 2020 and 31st January 2021. This includes both statutory and contractual notice periods.
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