This article was updated on 12 November 2020.

The Coronavirus Job Retention Scheme (also known as the furlough scheme), has now been extended to at least 3 December 2020. Whilst the Government has stated that additional guidance will be provided shortly, many employers are going to need to take urgent and immediate decisions in relation to their workforces.

We have summarised the key aspects of the extended Coronavirus Job Retention Scheme (CJRS) in our blog, but below we set out some important points that employers may need to consider now.

Redundancies and leavers

Employees employed as of 23 September 2020 (this was the day of the Job Support Scheme Announcement) and notified to HM Revenue & Customs via a full payment submission (RTI) on or before that date, who have since been made redundant can be rehired and enrolled into the CJRS.

Should you rehire, you must hold written agreements with both parties to minimise your exposure as an employer. Legal advice must always be taken.

From a payroll perspective, it is suggested that you create a new employee record with a brand-new employee number should you wish to process CJRS only payments. Additional furlough monies should not be processed as a payment after leaving (PAL) as we do not know when the extended scheme will end and if the Job Support Scheme will interact with this extension.

No minimum term of furlough is needed to enter the scheme

Previously, employees had to have been furloughed for at least a 3-week period between 1 March and 30 June 2020 to be eligible for furlough after 1 July 2020. Under the lockdown extension, by contrast, employees will be eligible provided they were on the employer's full payment submission (RTI) by 23.59 on 30 October 2020 - no minimum three-week term is required.

Steps to take if your PAYE scheme is closed

If you decided to terminate your workforce due to the impact of COVID and decided to close your PAYE scheme, then you can reopen this by contacting HM Revenue & Customs. You will need to quote:

• Date of PAYE closure
• Reason for the activation request (effectively making your scheme live again)

You must ensure your PAYE scheme is LIVE before you administer any payrolls and should contact HM Revenue & Customs as soon as possible on T: 0300 200 3200 to discuss. 

Communicating with your employees

It is your responsibility to keep your workforce up to date – despite the Government constantly changing the goal posts around Coronavirus support. Some employers may have already put in place appropriate JSS (Open) temporary working agreements with their employees to commence on 1 November. In such cases, employers should now communicate with their employees about the extension of the CJRS (and that the JSS has been postponed) and, if appropriate, ask them to agree to be furloughed until December instead – or the date in which CJRS ends.

You may have some new employees to consider who had not been furloughed previously and had missed the eligibility criteria back in June 2020. If you are now considering furloughing any such employees up until December, it will be important to enter into the more detailed furlough agreement that you have used for other furloughed employees.

You will need to tailor this to suit your own situation and should always take legal advice.

Remember, CJRS is available to support employers who are severely affected by coronavirus so care should be taken when selecting staff for the extended support.

Furlough payments timescales

HM Revenue & Customs will ensure that all claims are paid within six working days although the extended portal for November claims will not open until week commencing 9 November therefore, it's a good now to consider you cash flow to fund payroll falling within the next two weeks. Your Johnston Carmichael adviser can help you with this, please get in touch if this is an area you need help with now.

Employee Communication

Due to the delays with technical guidance, the Government confirmed that furlough can be backdated. So a retrospective agreement can be applied, but only up until Friday 13 November 2020. That is the cut-off date for retrospective agreements under the new scheme if you would like to use this from 1st November 2020.

Using the retrospective window is a perfect opportunity to check that furlough letters were correct. If not, they could undermine the business’ whole entitlement to furlough grants.

Here to help

If you would like to discuss anything is this blog 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.