On 31st October the Prime Minister announced throughout the crisis the government’s priority has been to protect the livelihoods of businesses and people. The government’s plan for the current coronavirus outbreak includes a financial plan in regards to the extended furlough scheme.
The Coronavirus Job Retention Scheme (CJRS) will extend to December. It will be similar to the conditions set 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. Due to the Lockdown announced on Saturday the cost of retaining workers will be reduced for employers which is beneficial for employers struggling due to the continuous restrictions placed on them due to closures, reduced hours and income.
Who is eligible for the Extended Furlough Scheme?
If you are an employer with a UK PAYE scheme, whether you are a small, large, charitable or a non-profit organisation you are eligible for the extended Job Retention Scheme. Neither the employer nor employee needs to have formerly used the CJRS. It will run for a further month which means businesses will be able to bring furloughed employees back to work on a fulltime or part-time basis. The employer will only be asked to cover National Insurance and employer pension contributions.
The Job Support Scheme, which was planned to come in on 1st November, has been delayed until the extended furlough scheme ends. 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.
The government has not specified who is particularly ineligible however they expect that publicly funded organisations will not use the scheme how if revenues have declined for partially funded organisations they will be eligible.
If your employee is on any type if contract they will have to agree with any working arrangements with employees. You 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 approach as currently under the CJRS.
When claiming the CJRS grant for furloughed hours, employers will need to report and claim for at least a period of 7 days. Similarly employers will need to report hours worked and the usual hours an employee would work in a claim period. For worked hours, employees will be paid by their employer mentioned in their employment contract and employers will be responsible for paying the tax and NICs due on that amounts. The grant MUST be paid in full to the employee. However employers are still able to choose to top up employee wages above the scheme grant at their disposal.
The Government will confirm shortly when claims can first be made in respect of employee wage costs during November, but there will be no gap in eligibility for support between the previously announced end-date of CJRS and this extension.
Additional guidance from HMRC will be outlined in the coming week.
How can Asmat & Co help?
There are a number of ways in which we may be able to help. It’s vital to ensure your accountant is helping you in this unprecedented time. If you need help, please call us on 01753 424 968 or use our contact form. We can offer a free consultations, support and advice to avoid contact.