Latest update on the furlough scheme

On 05 November Chancellor Rishi Sunak announced that the government will extend the current Coronavirus Job Retention Scheme which offers 80% pay up to £2,500 per month.

This came as a surprise to most given that the Government had said the scheme would be replaced from the 1st November by the Job Support Scheme which was not as favourable as the current CJRS.

The change has been welcomed by many providing support to those businesses most affected, but it has caused concern that it means restrictions may stay in place for some time, and that the retail and hospitality industry will not get back to normal service until spring 2021. The Chancellor said that the government is trying to provide some certainty over the winter months for those businesses most affected and protect jobs over a ‘difficult winter’. He went on to explain that the economic effects are much longer lasting for businesses than the duration of any restrictions, but hoped that these measures help businesses recover and get back on their feet.

When the scheme was first announced, it prompted many questions, particularly for those people who had recently started new roles or were due to start new roles and whether or not they would not qualify for the scheme.

Here is a summary of the key points and other support offered in the announcement last week.

Extension of the CJRS – What we know

•   Five month extension to the scheme which was due to end on 31 October 2020.

•   Government will pay 80% of employee’s current salary up to £2500 per month.

•   Businesses will have flexibility to use the scheme for any amount of time and shift pattern including furloughing full time.

•   NO employer contribution to wages for hours not worked.

•   Claims can be made from 8am on 11 November 20.

•   Claims made for November must be submitted to HMRC no later than 14 December 2020.

•   Neither employee nor employer needs to have previously claimed or been claimed for.

•   Employees must be employed and on their employer’s PAYE payroll by 30 October 2020.  Employers must have made a PAYE
    RTI submission to HMRC between 20 March 2020 and 30 October 2020.

•   Employers are only asked to cover NI and pension contributions for hours not worked.

•   Employees that were employed and on the payroll on 23 September 2020 but were made redundant or stopped working
    afterwards can be re-employed and claimed for. Employer must have made an RTI submission to HMRC from 20 March 2020
    to 23 September 2020.  

•   The scheme will be reviewed in January

•   The Job Retention Bonus won’t be paid in February 2021 but will instead be redeployed as a retention incentive at the
     ‘right time’.

Other support

•   Self-Employed Income support scheme grant increases from 55% to 80%.  The third grant covers November to January
    at 80% of average trading profits, up to a maximum of £7500.

•   Cash grants of up to £3,000 per month are available for businesses which are closed

•   Extension to mortgage payment holiday

•   Funding for councils to support the local public health response

•   Government backed loans extended until 31 January 2021

•   Statutory sick pay rebate scheme – Employers can claim back up to 2 weeks of SSP provided they meet all of the below

          →   they had already paid the employees sick pay,

          →   they are claiming for an employee who is eligible for sick pay due to coronavirus,

          →   their PAYE payroll system was created and started before 28 Feb 2020 and

          →   they have fewer than 250 employees on 28 Feb 2020.

For advice and help you can contact our employment law specialists via email to either Reyhana Koser or Ellie Robinson-Brady, alternatively please telephone 0800 118 1500 to find out how we can help you.