In a welcome move timed to coincide with the announcement of further public health restrictions in England, the CJRS is extended until December.
In a welcome move, timed to coincide with the announcement of further public health restrictions in England, the Coronavirus Job Retention Scheme (CJRS) has been extended until December 2020. Funding will be available for up to 80 percent of an employee’s pay in relation to unworked hours, capped at £2,500 per month. The grant must be paid to the employee in full. Employers do not have to have used the CJRS previously to be eligible to make a claim. Employees can be included on a CJRS claim for November even if they have not been included on a previous CJRS claim. Employees can be fully furloughed or flexibly furloughed. CJRS for November will broadly mirror the scheme as it operated in August. The Job Support Scheme which was due to come into force on 1 November, will now be postponed until the end of the CJRS.
Our comments below are based on the high level guidance issued on 31 October 2020 and may be subject to change as further guidance is issued.
Which employers are eligible?
All employers with a UK bank account and UK PAYE schemes can claim the CJRS grant. This includes employers who have not previously used CJRS. As with the previous CJRS arrangements, the Government expects that publicly funded organisations will not use the scheme. Partially publicly funded organisations may be eligible if their commercial income has been disrupted.
Which employees are eligible?
Employees who were included on an employer’s Real Time Information (RTI) submission made on or before 30 October 2020 are eligible. Employees do not require to have been included in a previous CJRS claim.
Employees can be on any kind of contract and employers will be able to agree any working arrangements with employees. Employees can either be fully furloughed, or flexibly furloughed.
What costs will employers have to meet?
Employers will be required to pay employees for all hours worked at the appropriate contractual rate. Employers will also be responsible for employer NIC and pension contributions in relation to any grant claimed for an employee’s unworked hours. Employers can choose to top up an employee’s pay in addition to the CJRS grant claimed for the unworked hours.
How will the grant for unworked hours be calculated?
Employers will need to report and claim for a minimum period of seven consecutive calendar days. The grant will be calculated with reference to the employee’s ‘usual hours’. Employers will also need to report the hours worked in the claim period.
How can a claim be made?
Confirmation on when and how CJRS claims can be made for November, along with details of an updated claims service will be made available shortly.
Businesses will continue to be paid in advance for wage costs. There is no requirement for employers to pay employees prior to making their CJRS claim. It appears that employers may be paid in arrears for the period before the system is in place to allow claims to be made.
What should employers do next?
Employers should assess which employees they wish to put on furlough from 1 November, and ensure that appropriate furlough agreements are in place prior to the start of the arrangements.
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