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The Coronavirus Job Retention Scheme was put into place to support employers and employees, and avoid staff redundancies as a result of COVID-19.
Originally expected to close at the end of October 2020, the CJRS has since been extended.
To save you from the jargon, our CJRS guide talks you through the scheme.
The scheme is for employers of staff who would otherwise have been laid off due to the impact of COVID-19 in the UK.
Instead of making staff redundant, employers can furlough their employees and claim a government grant to help them with employment costs.
The CJRS extension grant is largely similar to what was available to employers in August.
Previous versions of the CJRS grant have been paid in arrears, meaning that employers have had to up-front the cost themselves, before claiming the grant back.
The government have warned that there will be a brief transition period where employers will continue to receive the grant in arrears.
The CJRS grant is open to any UK based employer with a PAYE scheme.
Employers can claim support using the extended Coronavirus Job Retention Scheme, even if they’ve never previously used it.
Our graphic below shows which employees you’ll be able to claim the CJRS extension for.
Employers can use the CJRS to claim for a minimum period of 7 days. These must be consecutive days.
Directors have been able to claim the CJRS grant through previous versions of the scheme, so it’s expected this will still be the case.
The difficulty for company directors is that they typically take a lower salary as an employee through payroll, and then top this up with dividends.
Because the scheme is based on what goes through payroll, directors of limited companies might not be able to claim much support.
When the scheme first launched furloughed staff were not permitted to work, but subsequent versions of the scheme have been more flexible.
So, this means that you might:
From an employee’s perspective, they’re also allowed to freelance whilst on furlough, or continue working for another employer as usual.
The Coronavirus Job Retention Scheme guidance refers to your employee’s usual hours. Our table shows you how to work out usual hours, depending on whether your employee works a fixed number of hours or variable hours.
What are usual hours for employees who work a fixed number of hours? | What are usual hours for employees who work a variable number of hours? |
Fixed hours mean that the employee is contracted to work the same number of hours each pay period. | Working variable hours means that your employee isn’t contracted to work a set number of hours, and you pay them depending on the hours they work. |
The calculation for working out fixed hours comes directly from HMRC guidance which includes working examples.
In your calculation, include periods where the employee was on leave, off sick, or had family statutory leave as if the leave had not been taken. |
The usual hours will be the greater of either:
OR
|
Staff that are still able to work from home should do so whilst receiving their normal salary. The Coronavirus Job Retention Scheme is only for the hours that employees are unable to work due to the COVID-19 outbreak.
The grant is for claims which cover 1st November 2020 onwards, though employers have not yet been told when they’ll be able to submit their claims for that period.
The Coronavirus Job Retention Scheme has now been further extended, and will operate until the end of April 2021. The Chancellor confirmed an additional month of support beyond the previous end date of March, in an announcement on 17th December 2020.
Originally expected to launch on 1st November 2020, the Job Support Scheme (JSS) has been postponed. This is because the government have extended the Coronavirus Job Support Scheme until the end of April 2021.
The Job Retention Bonus was originally available for employers whose previously furloughed staff were continuously employed until January 2021. As the furlough scheme has since been extended until the end of April 2021, the Job Retention Bonus no longer applies.
In his statement announcing the CJRS extension, Chancellor Rishi Sunak confirmed that another incentive scheme will be made available when the time is right.
To use the Coronavirus Job Retention Scheme, you will need to report:
Yes, an employee can give notice that they’re leaving an employer even while furloughed under the Coronavirus Job Retention Scheme. Being on furlough doesn’t affect their normal contractual rights.
Yes, HMRC confirm that they start publishing the details of furlough claims from December 2020 onwards. The information is to be available on the GOV.UK website, showing:
This means that if we submit a furlough claim on your behalf, HMRC will publish this information.
Employees will also be able to see the details of claims made for them, by viewing their Personal Tax Account.
HMRC have more information about this here.
Visit our Business Support for COVID-19 information hub, or talk to one of the team about our online accountancy services. Call 020 3355 4047, or request a free call back.
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