On 5 November 2020, the Government announced that it would be extending the Coronavirus Job Retention Scheme (CJRS), which was due to end on 31 October 2020, until 31 March 2021. That same day, HMRC published a Policy Paper which gave an overview of how the Extended CJRS would operate for periods after 1 November 2020.
We reported on the Policy Paper here, but following the subsequent release of the multiple guidance papers and the new CJRS Treasury Direction we are now updating what we know as to the key points of the Extended CJRS.
• From 1 November 2020, employers can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month. Employers will be liable for employer National Insurance contributions and employer pension contributions, plus any voluntary top-up to pay that they choose to make.
• Employees who participate in the Extended CJRS do not need to have been furloughed before. To be eligible, the employer must have made a Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying payment for that employee. Employees who were made redundant or who otherwise stopped working for their employer on or after 23 September can be re-employed and then furloughed for claim periods after 1 November. This update closes arguments made by individuals who have resigned and means that employers have a discretion to re-employ and furlough employees.
• There is no limit on the number of employees an employer can claim for in respect of claim periods from 1 November 2020 onwards.
• Employees can be flexibly furloughed or be furloughed on a full-time basis. This means employees can be furloughed for any amount of time or work pattern.
• For claim periods after 1 November 2020, a new employer is eligible to claim in respect of the employees of a previous business transferred if the TUPE or PAYE business succession rules apply to the change in ownership, provided: 1) the employees transferred from their old employer to their new employer on or after 1 September 2020; 2) the employees were employed by either their old employer or new employer on 30 October 2020; and 3) there was a RTI submission to HMRC, by their old or new employer between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
• Claims cannot be made for any day that an employee is serving contractual or statutory notice between 1 December 2020 and 31 January 2021. This includes individuals serving notice of retirement or resignation. If an employee subsequently starts a contractual or statutory notice period on a day covered by a previously submitted claim, the employer will need to make an adjustment to rectify the payment in their next claim to HMRC.
• HMRC has confirmed the dates for when claims must be submitted. These are set out in the table below. Once HMRC has confirmed the claim is correct, payment will be made within six working days. Employers must keep a copy of all claim records for six years. HMRC may accept a claim made after the relevant deadline if the employer has a reasonable excuse for failing to make a claim in time. However, there is no example provided of what a reasonable excuse may be, therefore, employers should rely on this excuse with caution.
|Claim in furlough days in||Claim must be submitted by|
|November 2020||14 December 2020|
|December 2020||14 December 2020|
|January 2021||15 February 2021|
|February 2021||15 February 2021|
|March 2021||14 April 2021|
• As before, furlough needs to be by agreement and confirmed in writing. The furlough agreement must be retained for five years and must be completed before the start of the furlough claim period to which it relates.
• The guidance notes that employees on maternity leave could look to end their maternity leave early to enable them to be furloughed (with the employer’s agreement) provided they give the statutory eight weeks’ notice. Doing so, would allow the employee to receive furlough pay, which is typically higher than Statutory Maternity Pay. The same rules would apply to employees on adoption and shared parental leave although this is not specifically covered in the guidance.
• HMRC will publish the name and company number of employers who have made claims under the scheme for the month of December onwards and may either publish the amount of the Extended CJRS claim made by that employer or an amount that gives a reasonable indication of the claim, rather than the exact amount.
Many employers will welcome the extension of the application of the Extended CJRS and the return to more generous Government contributions, allowing greater assistance to employers than in the previous few months. Also being able to furlough people who haven’t been furloughed before (which from 1 July could only be done in very limited circumstances) is helpful. However, unlike before, employers are no longer allowed to claim for any day that an employee is serving contractual or statutory notice between 1 December 2020 and 31 January 2021.
Also when deciding whether to claim under the Extended CJRS from 1 December 2020 onwards, employers will now need to consider whether the benefit of claiming outweighs the potential reputational damage caused by their company name and potentially the amount they have claimed being put in the public domain.
If you have any questions or concerns relating to the Extended CJRS or would like some advice on making redundancies, please contact any member of the team.