Extension of Coronavirus Job Retention Scheme

Employers across the UK were appalled with the news of the further lockdowns proposed. Though the government has been praised for putting people’s health before mere economic gain the interesting element here is that the government has also been able to safeguard jobs. The good news is that the Coronavirus Job Retention Scheme has now been extended. Formerly the furlough scheme (that was previously extended for 4 months) was set to end on 31st October 2020. Now, it begins again from 1st November 2020 and will run till the end of the month to be followed by the Job Support Scheme.

※  What Are The Changes In Job Retention Scheme?

The extended furlough scheme will be more benevolent towards employers for employers need not mandatorily bear 20% of the burden as they were doing with the furlough grant set to 60%. It has now gone back to 80% from the government for employees on furlough towards the hours not worked. Thus, employers will have only 5% of a burden as the National Insurance Contributions as well as the Work Place Pension amounts will have to be borne by the employer for the hours that are not worked as well. However, considering the way furlough has been in September and October – these measures are certainly tending towards generosity.

※  When Was This Announcement Made?

The Prime Minister made this announcement on 31st October 2020. The government wanted people to know that even though it was going to be a difficult winter it did not mean that people were going to be left to their own devices. Job protection and the protection of people’s lives both remain on par with the government.

※  What Is The Duration Of The CJRS?

It starts from 1st November and will remain open till December. It is supposed to seamlessly merge with the previous scheme and so employers need not worry about putting their staff on furlough from the 1st of November. Details of how the claim is to be made are to follow.

※  How Does The Scheme Work?

• Employees are to receive 80% of the amount they are usually paid but this will be for the hours they do not work
• The cap limit has increased as compared to September and October to the previous £2,500
• Cost of employers for retaining their staff will decrease to 5% which will be a relief to them in the present lockdown scenario making the scheme more employer-friendly than the October version

※  Who Has The Scheme Been Extended To?

All employers are to be considered under this scheme be they large or small. Even charitable organisations and those working for non-profit are to be included. Flexible furlough can still be done. Thus, employers can keep their staff on the part-time working basis and for the remaining hours that the employee is unable to work the government will pay the furlough amount for as per the guidelines.

Due to the multiple changes that are taking place, employers are facing issues in remaining compliant. Doshi Outsourcing is a firm that helps employers with their accountancy, taxation, VAT and payroll matters. A firm of dedicated accountants who are ready to work on remote and are compliant with the existing GDPR.

※ Other Guidelines On The Job Retention Scheme (JRS):

• The scheme will operate on the lines of the previous where employers will be aided by the government towards the wage costs of their employees to save jobs.
• Flexible furlough is still open even though the employers can receive 80% towards the grant from the government.
• Full-time furlough too is possible in case the employee cannot work.
• Details on how the claims are to be made are still to be worked out. However, employers have been encouraged to begin furloughing their employees as had been initially done in March with the claim process details to follow shortly.
• The JSS or Job Support Scheme is to follow this scheme.

※  Which Employers Are Eligible?

• Previously having used the CJRS scheme by the employee or employer is not a consideration. The employer merely needs to have a UK PAYE scheme and bank account
• If the organisation is on partial public funds it is possible that they could apply if the private revenue has been ruined due to the pandemic situation though those organisation on full public funds are disallowed

※  Which Employees Are Eligible?

• Employees who are on the PAYE scheme of an employer by 30th October 2020 at 23:59 hours latest. Thus, RTI for this employee would have to be submitted on or before this time.
• Any time of working contract will be honoured (As per the new rules) so working arrangements are flexible.

※  How Are The Calculations To Be Made?

• The previous method of calculating hours not worked is to be followed (about the usual hours worked)
• The minimum claim period is set at 7 continuous days.
• Employers are supposed to report the hours that the employee has worked and what hours the employee is usually expected to work when making the claim.
• The hours worked are subject to payment as per the contract and the national insurance and workplace contribution payments by the employer will have to be met.

※  What Support Are Employers Getting Towards Wage Costs?

• For usual hours not worked the government will be funding 80% of the employment costs (excluding taxes and pension payments) to the cap amount stated at £2500.
• For normal hours that the employee works the employer needs to pay the usual along with the taxes and pension amounts
• If the employer so desires, he/she can choose to top-up the employee’s pay as per their discretion as is in the current CJR scheme
• There is to be no gap to be considered in the employee’s eligibility for furlough i.e. 31st October 2020 and the present extension starting 1st November 2020

Furlough calculations have never been easy but with an outsourcing partner like Doshi, Outsourcing things would become infinitely easier. Instead of worrying about processing the right claim amounts, you would only need to remember to pay your employees as we will handle the tricky part of the claims.