What is the CJRS Extension / Extended Furlough Scheme?
On 5th November Rishi Sunak introduced CJRS.3. Despite the preparations and planning that went into the Job Support Scheme, which was due to start 4 days earlier and is now put on hold for the foreseeable future, the government announced this extension to the furlough scheme.
With the portal opening at 8am today, we thought it best to note down some similarities to the first time round and a few important differences too, so let’s dive in.
What hasn’t changed?
-All employment rights continue during furlough, e.g. accrual of holiday pay and leave.
-Employers can top up furlough pay but are not obliged to.
-Employers will still be liable for employer’s NIC and pension contributions for any unworked hours.
-Employees can train, volunteer, or work for another employer whilst furloughed with the agreement of the employer.
As before you have two options;
-Fully furlough employees which means the employee does no work for the employer.
-Flexibly furlough employees which means they can work for any amount of time and any work pattern, This way you just claim the grant for the furloughed hours (referenced to the hours the employee would usually have worked).
It is still unknown whether the full 80% employer funding will continue past January, a further announcement closer to the time will give more details on this.
What has changed?
One of the most important parts of the new policy is the deadline that has been introduced. Now, claims must be submitted within 14 calendar days of the month end you are claiming for. If the 14th falls on a weekend you have until the next working day.
We have listed the deadlines below so you can make a note in your diary.
| Claim for furlough days in | Claim must be submitted by |
| November 2020 | 14 December 2020 |
| December 2020 | 14 January 2021 |
| January 2021 | 15 February 2021 |
| February 2021 | 15 March 2021 |
| March 2021 | 14 April 2021 |
This could be a huge burden for employers, but we are here to help and on a more positive note, the sooner the claim is in, the sooner HMRC will pay – they have committed to pay employers within just 6 days.
In a bid to prevent an increase in unemployment figures, individuals who had a leaving date reported after the 23rd September can be reinstated if the employer so chooses.
Calculating furlough.
Employees on fixed pay.
To calculate the amount of furlough to claim, you must refer back to a ‘reference period’.
For employees on a fixed pay the reference period is the last pay period ending on or before 19 March 2020 for employees who either:
-were on your payroll on 19 March 2020, that is you made a payment of earnings to them in the tax year 2019 to 2020 which was reported to HMRC on a Real Time Information (RTI) Full Payment Submission (FPS) on or before 19 March 2020
-you made a valid CJRS claim for in a claim period ending any time on or before 31 October 2020
For all other employees, the reference period is the last pay period ending on or before 30 October 2020; this will only apply for periods starting after 1 November 2020.
One exception is if your fixed pay employee has worked enough overtime to have a significant effect on the amount you need to claim, you should calculate 80% of their usual wages using the method for employees whose pay varies.
Employees on variable pay.
If your employee has variable pay, how you work out their usual wages depends on when they were on your payroll.
For employees’ who were on your payroll on 19 March 2020, that is you made a payment of earnings to them in the tax year 2019 to 2020 which was reported to HMRC on a Real Time Information (RTI) Full Payment Submission (FPS) on or before 19 March 2020, you should calculate 80% of the higher of:
– the wages earned in the corresponding calendar period in the tax year 2019 to 2020
– the average wages payable in the tax year 2019 to 2020
This also applies to employees’ for whom you made a valid Job Retention Scheme claim in a claim period ending any time on or before 31 October 2020.
For all other employees’ you should calculate 80% of the average wages payable between 6 April 2020 (or, if later, the date the employment started) and the day before they are furloughed on or after 1 November 2020.
At what cost?
At present, nothing previously mentioned has officially been scrapped, just postposed. As we mentioned above, the Job Support Scheme is now not available and the Job Retention bonus of £1,000 per employee, due to be paid out early next year, has been delayed to ‘a more appropriate date’.
As always, we are here to help you in any way possible, if you have questions please call us on 01482 888820 on or email us at bim@sowerbyllpcouk.wpengine.com
Information correct as at 11/11/2020.