In response to the continuing COVID-19 crisis, the UK government on 31 October 2020 announced a new national lockdown for England, to run from 5 November 2020 until 2 December 2020, subject to extension. The UK’s other devolved nations also have discrete restrictions in place.
Following the UK government’s announcement, the Coronavirus Job Retention Scheme (CJRS), which was due to close 31 October 2020, is now extended by one month “until December” 2020. The government has not given an exact date in December when the extended CJRS will close.
As before, generally all businesses offering non-essential goods and services will be required to close. However, those working in certain sectors and who cannot work from home will be permitted to travel to work. (For details, see this guidance.)
The operation of the government’s proposed successor to the CJRS, the Job Support Scheme, will now be postponed until the end of the extended CJRS period.
The level of grant under the extended CJRS will reflect that of the pre-August 2020 grant, as employers will now be able to claim for 80 percent of employees’ salaries for hours not worked, up to the cap of £2,500 per month. The CJRS had been tapering in anticipation of its wind-up; employers were previously able to claim only 60 percent of employees’ salaries for hours not worked in October.
Employers will be required to pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work and are free to elect to top-up employee pay. For any hours employees do work, their employers would need to pay them in accordance with their contractual terms and pay income tax and NICs in the usual way.
Eligibility of employers
Any business in the private sector, large or small (including charities), which has a UK bank account and is registered for PAYE will be able to apply for a grant under the extended CJRS, and there is no prerequisite to have applied under the CJRS previously. As before, publicly funded businesses are not expected to apply under the CJRS, although partially funded businesses may be able to do so if their funding has been adversely affected by COVID-19.
Employees must have been on their employer’s PAYE payroll by 23:59 on 30 October 2020; i.e., there must have been a Real Time Information submission made on or before 30 October 2020 notifying payment for that employee to HM Revenue & Customs. As before, employees will need to be furloughed for a minimum of seven consecutive days to be eligible.
As before, businesses will be able to flexibly bring furloughed employees back to work on a part-time basis or furlough them full-time, as agreed with the employee. The original CJRS allowed, but did not obligate, employers to rehire former employees and to furlough them under the CJRS; however, it remains unclear whether this will remain the case under the extension.
Business grant policy is devolved to nations of the UK. The government also announced business grants with a value of up to £3,000 per month for those businesses in England whose premises are forced to close due to local or national restrictions, pursuant to the Local Restrictions Support Grant.
More information on the extended CJRS is available on the UK government website.