On Saturday 31 October the Government announced an extension to the Coronavirus Job Retention Scheme (CJRS) which was due to end that day. The CJRS has now been extended and will run until at least Wednesday 2 December, which is the date on which the new England-wide lockdown is due to end.

In a surprise last-minute announcement the Prime Minister announced that furlough payments would be extended and that the previous level of support worth 80% of wages would be reinstated for people unable to work or unable to work their full hours as a result of the extended coronavirus restrictions across the UK. This move could prove crucial to non-essential retail and hospitality services forced to close during the four-week lockdown, along with pubs, cafes and restaurants - who can offer only takeaways.

However, the extension does not only apply to hospitality and leisure businesses. The scheme will be open to all eligible employers and employees, throughout the UK with a new eligibility date of 30 October, to allow new entrants into the scheme and current employers using the scheme to re-apply. 

In addition, the Prime Minister also confirmed that the Job Support Scheme (JSS) will not go live from 1 November 2020, but the intention is that it will commence after the CJRS ends.

Nicola Sturgeon, First Minister of Scotland, has clarified that CJRS can be accessed by all employers regardless of the tiered based approach across Scotland.

The Scottish Government is also seeking clarity on whether the CJRS would continue to be available after Wednesday 2 December, should Scotland require to implement a full-lockdown beyond that date.

Key Points:

• The Job Retention Scheme will operate as the previous scheme did, with businesses paid upfront (within a fourteen-day period) for wage costs (there may be a delay in processing initial claims given the late reinstatement of the scheme)
• The August 2020 rates will be reinstated meaning that 80% can be claimed in respect of each furloughed employee
• Employers must still maintain PAYE and pension liabilities
• Flexible furlough will be allowed throughout the scheme extension
• The Job Support Scheme (JSS) will go live at the end of the furlough extension
• The Job Retention Scheme extension is open to new employers meaning you don’t need to have already benefited from the scheme either in phase one or two
• To be eligible for the scheme, all employees must have been included on a successful real time information return by 23:59 on Friday 30 October 2020 (we’ve explained this further under the employee heading in the next section below).

Who is eligible?

Employer

• As before, all employers with a UK bank account and operational PAYE scheme can claim the extended funding
• The Treasury has announced that publicly funded organisations will not use the scheme which mirrors the existing CJRS guidance

 Employee

• To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30 October 2020. This means a (RTI) full payment submission must have been successfully filed
• Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees
• Employers 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 methodology as currently under the CJRS
• When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of seven consecutive calendar days
• Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period
• For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts
• Those who have since been made redundant can be rehired and placed on the Scheme as long as they were:
  - Employed as at 23 September 2020 and
  - Notified on a RTI submission on or before this date

What should employers do?

• Immediately update their agreements with employees and ensure both parties are clear on the current situation
• Communicate with your workforce and help manage the confusion created by this last minute change within government
• Determine a suitable working rota should you wish to utilise flexible furlough and ensure this is shared with your payroll department or provider

Opinion

The extension of the CJRS was an unexpected development and clearly a reaction to the new lockdown restrictions to be applied in England. The updated guidance for the replacement scheme, the JSS, had only just been issued the day before and given the complexity of that guidance, employers and advisers will be pleased to have further time to consider the details.

The JSS has been amended significantly from the scheme that was originally announced in September and is now more in line with the CJRS, but with different levels of support. The JSS does however, come with an entirely new set of rules, calculation requirements and bureaucracy, which places an unnecessary burden on businesses at the worst possible time given the continuing restrictions and the need to prepare for Brexit.

It would now be sensible to blend the JSS changes into a CJRS scheme that is further extended through to 30 April. We’ll wait to see as time progresses, if this is the route the Government take in the future.

These changes will unfortunately have come too late for many employees who have already lost their jobs.

Here to help

If you would like to discuss this further, or find out how Johnston Carmichael can help you at this challenging time, please don't hesitate to get in touch with me or your usual Johnston Carmichael adviser.