The Coronavirus Job Retention Scheme (CJRS) which is also known as the Furlough scheme has been extended for the second time and it will remain open until the end of March 2021. The extension will again allow employees to receive 80% of their current salary for hours not worked for the next five months.

The Job Support Scheme, which was announced to be a replacement of the Coronavirus Job Retention Scheme (CJRS), has been postponed until this furlough scheme ends.

The Extension and Further Economic Support Announcement 

The government has been providing financial support throughout the crisis and continuing to increase the generosity as the virus is affecting more lives and businesses. The Prime Minister announced on 31 October 2020 that individuals and businesses all over the UK are receiving additional financial support as part of the government’s plan for the next phase of its response to the coronavirus outbreak. The increased generosity includes the extension of the Coronavirus Job Retention Scheme (CJRS), announced on 31 October. 

Benefits From the Extended Coronavirus Job Retention Scheme (CJRS) 

The Coronavirus Job Retention Scheme (CJRS) aka the Furlough scheme - will remain open until the end of March 2021, with employees receiving 80% of their current salary for hours not worked, up to a maximum of £2,500.

The extended version of the scheme will reduce the cost for employers of retaining workers compared to the previous scheme which ended on 31 October making it more generous for employers than previously. 

Flexibility:

Businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time, and will only be asked to cover National Insurance and employer pension contributions which, for the average claim, accounts for just 5% of total employment costs.

Eligibility:

Employers small or large, charitable or non-profit, are eligible for the extended Job Retention Scheme.

Employers All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.

Publicly funded organisations are not expected to use the scheme, as has already been the case for CJRS. However, partially publicly funded organisations may be eligible where their private revenues have been disrupted. All other eligibility requirements apply to these employers.

Employees To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30th October 2020. Meaning, a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.

According to the current CJRS rules:

- Employees can be on any type of contract. Employers will be able to agree to any working arrangements with employees.

- Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Such calculations will broadly follow the same methodology as currently under the CJRS.

- When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days.

- Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.

- For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.

Check our first blog on this scheme to learn about the previous eligibility criteria. 

Blog: Coronavirus Grant of 80% of Wages and Salaries

Or, contact your local accountant in London to guide you.

Further Support 

Additionally, business premises forced to close in England are to receive grants worth up to £3,000 per month under the Local Restrictions Support Grant. Also, £1.1bn is being given to Local Authorities, distributed on the basis of £20 per head, for one-off payments to enable them to support businesses more broadly.

Mortgage Holidays

Mortgage payment holidays will continue. Borrowers who have been affected by coronavirus and have not yet had a mortgage payment holiday will be entitled to a 6 month holiday, and those that have already started a mortgage payment holiday will be able to top up to 6 months without this being recorded on their credit file.

Business Grants

Businesses required to close in England due to local or national restrictions will be eligible for the following:

- For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;

- For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;

- For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.

Chancellor Rishi Sunak’s Statement:

“Over the past eight months of this crisis we have helped millions of people to continue to provide for their families. But now - along with many other countries around the world - we face a tough winter ahead.”

“I have always said that we will do whatever it takes as the situation evolves. Now, as restrictions get tougher, we are taking steps to provide further financial support to protect jobs and businesses. These changes will provide a vital safety net for people across the UK.”

The furlough scheme has protected over nine million jobs across the UK, and self-employed people have received over £13 billion in support. This is in addition to billions of pounds in tax deferrals and grants for businesses.

When to Claim:

Claims from 1 November 2020 must be submitted by 11.59pm 14 calendar days after the month you’re claiming for. If this time falls on the weekend then claims should be submitted on the next working day.

You’ll need the Government Gateway user ID and password you got when you registered for PAYE online. If you do not finish your claim in one session, you can save a draft. You must complete your claim within seven days of starting it. All claims for periods from 1 July 2020 to 31 October 2020 must be submitted no later than 30 November 2020.

Meaning, 30 November 2020 is the last day employers can submit or change claims for periods ending on or before 31 October 2020.

Contact Taj Accountants

As your reliable Small Accountants in East London, Taj Accountants aims to keep you updated with all the updated government grants and schemes. We also offer you a wide range of accounting and taxation advice to sole traders, limited companies or partnerships. Our team of expert accountants help our small business clients solve issues, create value, maximize growth and improve business performance. If you are planning to be a part of any of the government plans, feel free to contact Taj Accountants for advice. 

Relevant Links

1.Coronavirus Grant of 80% of Wages and Salaries

2.Update: Coronavirus Job Retention Scheme (CJRS) Has Been Extended

3.Furlough Replacement: Job Support Scheme

4.A Complete Guide to Job Support Scheme

DISCLAIMER: The purpose of the blog is to provide information and insight regarding the situation. The readers must contact experts before making any decisions based on the information. We highly appreciate you to contact Taj Accountants for further assistance.