How will the Coronavirus Job Retention Scheme (CJRS) work from November 2020 – March 2021?
The UK returned to nationwide COVID19 restrictions 5 November. To help employers the CJRS has been extended. Full guidance on how the scheme will work was released yesterday evening and can be found here: https://www.gov.uk/guidance/new-national-restrictions-from-5-november
I’ll summarise the most relevant points for small employers below.
Job Retention Scheme (CJRS) work from November 2020 – March 2021
Thankfully the scheme will continue to operate without much change.
• The Job Support Scheme (JSS) due to start 1 November will not now start when the Coronavirus Job Retention Scheme (CJRS) (aka furlough) ends
• The CJRS (which had ended 31 October) will continue to operate until 31 March 2021
• The CJRS grant will pay for 80% of the furloughed employee’s current wages, up to £2,500 per month. The employer must pay for all of the employer’s NIC and employer’s minimum workplace pension contributions on those wages.
• The rate of 80% government funding is set until January 2021 after which they will be a review.
• The employer can top-up the employee’s furlough pay at their own expense, if they wish to.
• For employees on a fixed salary the pay reference period used to calculate the 80% remains as the last pay period ended on or before 19 March 2020 – essentially meaning that the 80% funding will remain the same as before.
• Employees who were on the employer’s payroll and paid by 30 October 2020 will qualify to be included in CJRS claim for November; they don’t have to have been included in an earlier CJRS claim.
ACTIONS TO TAKE NOW
Backdating of agreements between employers and employees is allowed as long as the agreement is in place by 13 November – so our URGENT ADVICE is:
- If you’re planning to place an employee on furlough for November you should document this fact by writing to the employee (and seeking their agreement) now
- If you planning on extending the furlough of an employee whose furlough ended 31 October 2020 then again you should agree this with your employee and write to them document this fact (an email will suffice in the case of furlough extensions)
- Put the above HR paperwork in place now and let us know once you’ve done that
- Each of these grants is taxable – businesses and self-employed would do well to budget for future tax bills accordingly
- Record keeping – when claiming a grant remember to keep documentation showing evidence of how your business has been affected by COVID19. More detailed advice here: https://masseyaccountingcompany.com/2020/05/18/seiss-grant-what-next/
Other previous COVID-19 posts remain relevant and are:
- Lockdown 2.0
- Winter Economy Plan – What it means for the self-employed
- COVID-19 £1,000 Job Retention Bonus
- You’ve claimed the SEISS grant – What next?
- COVID-19 Self-Employed Income Support Scheme (SEISS): Get ready to claim
- Coronavirus (COVID-19): Help for the Self-Employed – PER THE 26 MARCH ANNOUNCEMENT
- Help for the Self-Employed and other FAQ’s
- Can the Self-Employed go to work?
- What financial support is available for UK businesses? – NOW UPDATED
Enjoy saving tax?