Coronavirus Job Retention Scheme Extended Until 30 April 2021
19/12/2020 - 12 minutes readChancellor Rishi Sunak has extended the furlough scheme for one month until the end of April next year.
He said the move would provide “certainty for millions of jobs and businesses.”
It means the government will continue to pay up to 80% of the wages of workers who have been furloughed.
Mr Sunak also confirmed he would be extending the government-guaranteed Covid-19 business loan schemes until the end of March.
These changes come in the run-up to the next Budget, which the chancellor confirmed would take place on 3 March 2021.
CJRS Update – February 2021
In the latest Coronavirus Job Retention Scheme (CJRS) update, HMRC has announced that from February 2021, they will publish the names of employers who have made claims under the JRS for the month of December onwards.
The following information will be published:
- – the employer name
- – an indication of the value of the claim within a banded range
- – the company number for companies and Limited Liability Partnerships (LLPs).
The banded ranges are:
- – £1 to £10,000
- – £10,001 to £25,000
- – £25,001 to £50,000
- – £50,001 to £100,000
- – £100,001 to £250,000
- – £250,001 to £500,000
- – £500,001 to £1,000,000
- – £1,000,001 to £2,500,000
- – £2,500,001 to £5,000,000
- – £5,000,001 to £10,000,000
- – £10,000,001 to £25,000,000
- – £25,000,001 to £50,000,000
- – £50,000,001 to £100,000,000
- – £100,000,001 and above.
HMRC will also be improving the information available to furloughed employees by including details of claims made for them, for claim periods starting on or after 1 December 2020 in their Personal Tax Account on GOV.UK.
Information may be withheld if HMRC is satisfied that publication will expose the employer or its employee or anyone living with them, to serious risk of violence or intimidation.
If employers think that a serious risk of violence or intimidation will come from publicising their name, company registration number and amount of claim, they need to tell HMRC and provide them with evidence of why they think this.
This evidence could include:
- – a police incident number if you’ve been threatened or attacked
- – documentary evidence of a threat or attack, such as photos or recordings
- – evidence of possible disruption or targeting.
Further details on how to request that HMRC do not publish their details will be available soon.
What Situation Does My Business Have to Be in to Use the Scheme?
It does not appear that employees need to be facing redundancy in order for an employer to use the JRS. The guidance says:
If you cannot maintain your workforce because your operations have been affected by coronavirus (Covid-19), you can furlough employees and apply for a grant.
The Treasury Direction states, on this topic:
The purpose of JRS is to provide for payments to be made to employers on a claim made in respect of them incurring costs of employment in respect of employees who are within the scope of JRS arising from the health, social and economic emergency in the United Kingdom resulting from coronavirus.
and in relation to employees
whose employment activities have been adversely affected by the coronavirus and coronavirus disease or the measures taken to prevent or limit its further transmission.
What About Companies in Administration?
Where a company is being taken under the management of an administrator, the administrator can furlough and claim for employees. Administrators should only use the scheme if there is a reasonable likelihood of retaining the workers. For example, this could be as a result of an administration and pursuit of a sale of the business.
Which Employees Can Be Furloughed?
On the payroll
To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 on 30 October 2020. This means a Real-Time Information (RTI) submission notifying payment for that employee to HMRC must have been made between 20 March 2020 and 30 October 2020.
Because of the need to be PAYE, it seems that those under the age of 16 cannot have wages claimed under the Scheme. National Insurance numbers are only issued at the age of 16 so before that point, the child will not generally be considered PAYE.
No previous furlough needed
Employees do not need to have been furloughed before in order to be placed into the JRS during the extension. However, all employees will need to meet the eligibility requirements.
Employees made redundant
If employees were employed by you on 23 September 2020 and you made a PAYE RTI submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee) and they were made redundant or stopped working for you on or after 23 September 2020, they can also qualify for the scheme if you re-employ them.
There appear to be several HR issues related to this that are tricky to unravel.
The safest way appears to make it clear that employment is not continuous. To do this, a break of at least one week ending with a Saturday is needed.
There is an extremely high chance that the employee will be made redundant again at the end of the furlough period so the employer will need to go through the process again, which may require collective consultation dependent on the number of employees to be made redundant at the time, which may include some of the existing workforce as well as those brought back after having been made redundant the first time.
The further dismissal of these employees by way of redundancy may pose some issues. There is no absolute certainty that the two periods of employment will not be deemed continuous by an employment tribunal. This is because this situation has never been tested.
The rules on continuity mean that, after a redundancy, employment will be continuous if the employee starts a job for the employer within four weeks of the termination of employment but this applies where the offer of re-employment is made before the end of the employee’s employment under their old employment contract. This is unlikely to be the case in a furlough situation.
Additionally, the employer would need to understand they have to pay the NI/pension contributions for anyone they re-hire after redundancy so it will cost them to do this.
CJRS Extension – Types of Contract
Employees can be on any type of contract. You can claim for:
- – officeholders (including company directors)
- – salaried member of Limited Liability Partnerships (LLPs)
- – agency workers (including those employed by umbrella companies)
- – limb (b) workers
- – contingent workers in the public sector
- – contractors with public sector engagements in the scope of IR35 off-payroll working rules.
CJRS Extension – Foreign Nationals
Foreign nationals are eligible to be furloughed. Grants under the JRS are not counted as “access to public funds”, and you can furlough employees on all categories of visa.
CJRS Extension – Returning From FamilyLeave
If your employee returns from maternity, shared parental, adoption, paternity or parental bereavement leave and you are claiming in respect of a period that starts on or after 1 November, the normal scheme rules apply.
If your employee decides to end their maternity leave early to enable them to be furloughed (with your agreement), they will need to give you at least eight weeks’ notice of their return to work and you will not be able to furlough them until the end of the eight weeks.
CJRS Extension – Employees With More Than One Employer
If your employee has more than one employer, they can be furloughed for each job. Each job is separate, and for claims for periods on or before 31 October 2020, the cap applies to each employer individually.
Employees can be furloughed in one job and receive a furloughed payment but continue working for another employer and receive their normal wages.
If an employee has had multiple employers over the past year, has only worked for one of them at any one time, and is being furloughed by their current employer, their former employer(s) should not re-employ them, put them on furlough and claim for their wages through the scheme.
CJRS Extension – What Kind of Part-time Working Arrangements Can Be Used for Flexible Furlough?
The guidance confirms that any part-time arrangement, including any amount of time or shift pattern, can be agreed; employers have the utmost flexibility to assess what will work for them.
Clearly, the flexible furlough will not be an option for employers who have no work to provide to their staff. Such employers may choose to keep their employees on full furlough for as long as they deem necessary subject to the closure of the scheme in its entirety.
CJRS Extension – How Long Does Furlough Last?
There is no minimum furlough period.
CJRS Extension – Will the Payment be Taxable?
Yes, payments you make to furloughed employees will be subject to PAYE and National Insurance contributions.
Recommended reading: Chancellor Unveils New Job Support Scheme & Extends Self-employed Grant
Contact MCL Accountants on 01702 593 029 to optimise your tax position or if you need any assistance with your Job Retention Scheme claims or company accounts.
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Ishan provides financial management, taxation and transactional advice to business entities of all sizes. His expert areas include statutory compliance, business taxation, personal tax & transactional processing and systems. Industry sectors include professional services, retail, hospitality and entertaining & media and advertising services.