On Saturday (31st October) the Prime Minister issued further restrictions in response to the continued coronavirus outbreak. In order to provide additional financial support to businesses through this next stage of national lockdown, the Prime Minister announced that the Coronavirus Job Retention Scheme (CJRS) – also known as the Furlough Scheme – which had been due to close on 31st October will remain open until December.
The Job Support Scheme which had been due to start on 1st November will be deferred and commence once the CJRS has ended.
Main Points of the New Financial Support Measures
• Employees will receive 80% of their current salary for hours not worked, up to a maximum of £2,500. Under the extended scheme, the cost for employers of retaining workers will be reduced compared to the original scheme which ended on 31st October.
• Business premises forced to close in England will receive grants worth up to £3,000 per month under the Local Restrictions Support Grant.
• Mortgage holidays for home owners will also be extended.
Coronavirus Job Retention Scheme (CJRS)
• Employers (small, large, charitable or non-profit) are eligible for the extended CJRS which will continue for another month, throughout November.
• Businesses will have flexibility to bring furloughed employees back to work on a part-time basis or furlough them full-time, and will only be asked to cover National Insurance and employer pension contributions.
• This extended Job Retention Scheme will operate as the previous scheme did, with businesses being paid upfront to cover wages costs. There will be a short period when the government needs to change the legal terms of the scheme and update the system and businesses will be paid in arrears for that period.
• The CJRS is being extended until December. The level of the grant will mirror levels available under the CJRS in August, so the government will pay 80% of wages up to a cap of £2,500 and employers will pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work.
• As under the current CJRS, flexible furloughing will be allowed in addition to full-time furloughing.
• The Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the Furlough Scheme ends.
• Additional guidance will be set out shortly.
Who is eligible?
Employers:
• All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.
• The government expects that publicly funded organisations will not use the scheme, as has already been the case for CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted. All other eligibility requirements apply to these employers.
Employees:
• To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 on 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.
• 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 7 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.
What support is being provided and employer costs:
• For hours not worked by the employee, the government will pay 80% of wages up to a cap of £2,500. The grant must be paid to the employee in full.
• Employers will pay employer NICs and pension contributions and should continue to pay the employee for hours worked in the normal way.
• As with the current CJRS, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
• The Government will confirm shortly when claims can first be made in respect of employee wage costs during November, but there will be no gap in eligibility for support between the previously announced end-date of CJRS and this extension.
Business Grants
Businesses required to close in England due to local or national restrictions will be eligible for the following:
• For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;
• For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;
• For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.
Mortgage Holidays
Mortgage payment holidays will no longer end on 31st October. Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.
The FCA will announce further information shortly.
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