Posted: 04 / 11 / 2020
Under the Coronavirus Job Retention Scheme (CJRS), the Government announced that employers will be able to claim a grant from 1 March to cover 80 per cent of employees’ salaries up to a maximum of £2,500 per month.
This scheme originally ran until 30 June. It was then extended until the end of October.
The scheme has been extended again with the Government currently paying 80% of wages for the hours of furloughed employees up to a cap of £2,500 for periods from 1 November 2020 until 30 April 2021. The scheme only covers wages, meaning employers will be responsible for paying employer National Insurance contributions and employer pension contributions. As with the previous versions of the scheme, employers can choose to top up furloughed employees’ wages beyond the 80% paid by the government.
Who is eligible?
All employers with a UK bank account and UK PAYE schemes can claim under the scheme. Neither the employer nor the employee needs to have previously used the CJRS.
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. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made between 20 March 2020 and 30th October 2020.
Employees can be on any type of contract including full-time, part-time, agency, flexible or zero-hour contracts. Employers will be able to agree any working arrangements with employees. Note that employers do need to agree the furlough in writing with their 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 can be complex and as such we would recommend getting in touch for help.
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.
Whilst furloughed, employees cannot undertake any work for their employer. They are allowed to undertake training, volunteer for another employer or work for another employer.