Financial Support For Businesses Announced
On Saturday, it was announced that England will go back in to lockdown from 12.01am on Thursday 5th November until 2nd December. The restrictions are not as tough as the lock down earlier this year however a lot of businesses will be forced to close so the government has postponed the introduction of the new Job Support Scheme (JSS) Open and Closed which was supposed to have started yesterday and instead extended the Coronavirus Job Retention Scheme (CJRS).
Extended the Coronavirus Job Retention Scheme (CJRS) ‘Furlough Scheme’
Following the month long furlough extension announced on 31st October, 2020, a further announcement by the Chancellor on 5th November, 2020 stated that the CJRS, the ‘furlough’ scheme will be extended until the end of March 2021 for all parts of the UK.
The scheme will continue to provide employees with 80% of their current salary for hours not worked up to a maximum of £2,500 until 31st January, 2021. The UK Government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.
Businesses have the flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time. Employers will need to cover National Insurance and employer pension contributions which, the government has stated, ‘for the average claim, accounts for just 5% of total employment costs’.
- Operated as the previous scheme did, with businesses being paid upfront to cover wages costs. There will be a short period when the government needs to change the legal terms of the scheme and update the system and businesses will be paid in arrears for that period
- The level of the grant will mirror levels available under the CJRS in August, so the government will pay 80% of wages up to a cap of £2,500 and employers will pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work.
- As under the current CJRS, flexible furloughing will be allowed in addition to full-time furloughing.
- Employees retain their rights at work such as SSP and annual leave.
The Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends.
Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the CJRS process, including deciding who to offer furlough to, employment, equality and discrimination laws will apply in the usual way. To be eligible for the grant, employers must have confirmed to their employee (or reached collective agreement with a trade union) in writing that they have been furloughed or flexibly furloughed.
- Make sure that the agreement is consistent with employment, equality and discrimination laws
- Keep a written record of the agreement for 5 years
- Keep records of how many hours their employees work and the number of hours they are furloughed (for example, not working), for 6 years
- The employee does not have to provide a written response and employers do not need to place all their employees on furlough
The terms of any agreement must:
- Reflect the hours the employee has actually worked or not worked over the period of the agreement
- Allow the employer to satisfy the terms of CJRS so they can make a claim in relation to hours not worked
- Where consistent with employment law, any flexible furlough or furlough agreement made retrospectively that has effect from 1 November 2020 will be valid for the purposes of a CJRS claim as long as it is made according to the conditions above
- Only retrospective agreements put in place up to and including the 13 November 2020 may be relied on for the purposes of a CJRS claim.
How And When To Claim
Employers will be able to claim from 8am on Wednesday 11th November 2020. Claims can be made:
- In respect of an employee for a minimum 7 day claim window
- in advance
- in arrears for the period from 1 November 2020 to 11 November 2020
- Claims relating to November 2020 must be made by 14 December 2020.
- Claims relating to each subsequent month should be submitted by day 14 of the following month, to ensure prompt claims following the end of the month which is the subject of the claim.
- The closing date for claims up to and including 31 October remains 30 November 2020
- Grants payments are anticipated 6 working days after the first claim
- Agents who are authorised to do PAYE online for employers will be able to claim on their behalf
- Claims can be made from 8am Wednesday 11 November 2020
Additional Support For The Coronavirus COVID-19 Pandemic
Business premises forced to close in England due to national or local restrictions will be eligible for:
- 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.
Local Authority One-Off Payments
Local Authorities have been given £1.1 bn to be able to pay one-off payments of £20 per head to enable businesses to be supported more broadly.
Mortgage holidays have been extended, borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.
- 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.
- The government expects that publicly funded organisations will not use the scheme, as has already been the case for CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted. All other eligibility requirements apply to these employers.
- 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 on or before 30th October 2020.
*As under the current CJRS rules:
- Employees can be on any type of contract. Employers will be able to agree 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.
The Job Retention Bonus (JRB)
The launch of the Job Support Scheme has been postponed because of national developments related to the coronavirus pandemic. The Job Retention Bonus (JRB) will not be paid in February 2021 and a retention incentive will be deployed at the appropriate time. The purpose of the JRB was to encourage employers to keep people in work until the end of January. However, as the CJRS is now being extended to 31 March 2021, the policy intent of the JRB no longer applies.
Need help with calculations? Understanding what is required?
E mail us: firstname.lastname@example.org
Call us: 01865 522785