Halloween has turned out to be a nightmare for many business owners with the announcement of a second national lockdown.
The only saving grace is we’ve already lived through a national lockdown with little notice and no idea how to cope. This time We have a few days notice and many businesses will be much more prepared, and have the right tools to implement to see them through the next month.
Oh, and no home schooling – surely we need to take that as a win!
Today, Thursday 5th November, Rishi has confirmed that the help will be extended further than initially expected.
Furlough has been extended!
Along with the the lockdown announcement came the news that the Coronavirus Job Retention Scheme (aka furlough) has been extended. The new Job Support Scheme that was due to come into play from the 1st November has now been postponed until CJRS ends (actual dates to be confirmed!).
CJRS was due to end on the 31st October, but will now be extended to the end of March 2021.
So what support will there be?
The conditions will be similar to what we had in August. The grant will be 80% of the employee’s wages For time not worked, up to £2,500 per month. The employer will need to pay the hours worked, along with all the employer National Insurance Contributions and Employer pension contributions. The 80% will be reviewed in January.
For employees who were eligible for CJRS previously (ie those on payroll as of 19th March 2020): February’s pay will be the basis for those on fixed salaries, and an average of the 19/20 tax year for those on variable wages – just as furlough has been to date. This is the case whether the employee has been furloughed previously or not.
For new employees who weren’t eligible for CJRS previously (ie those employed after 19th March): This will be based on October’s pay for those on fixed salaries. For those on variable wages this will be based on an average between 6th April 2020, or the employees start date if later, and the 30th October 2020.
As before, the employer can top up the furlough pay at their own expense if they wish to.
Which employees qualify for this?
This is the good bit – employees who were not eh employer’s payroll as of 30th October, and were included in an RTI submission before 23:59 on Friday 30th October are included. They do not have to have been on furlough, or included on a previous claim. This means support is now available for many more employees than the previous scheme.
Are directors included?
Yes! There is no definitive guidance on directors, but directors are mentioned as eligible. However I would recommend directors going on flexible furlough so you can still keep on top of admin/emails, line up work for down the line, process some orders etc.
I feel it would be detrimental to most businesses if the director furloughed themselves fully, and essentially shut up shop for a few months!
Directors can then claim the grant for 80% of non worked hours. Please note however this will be based on your salary amount only, will not include dividends, so will be a minimal amount.
Can employees work at all?
Yes! Employees can either be fully furloughed or flexibly furloughed in the same way as since July. So that means if you have employees still able to work part time, or you need to bring employees back to work leading up to the lockdown ending to get ready to re-open this is completely fine to do.
There is no minimum number of hours an employee has to work. However, each furlough claim will again need to be for a period of at least 7 consecutive calendar days.
How do you claim the grant?
We expect it will be in a similar fashion to the previous claims, where we can submit the claim ahead of month end payroll. November claims can be submitted from the 10th November. There is a deadline this time of 14 days after month end for each months claim.
Job Retention Bonus
The Job Retention Bonus due in February will also now not be paid in February – as furlough will be extended, therefore the reason for the bonus is now not valid! It’s unclear if this is cancelled completely, or just pushed back to later in 2021.
Is there any other support?
Yes – there are new local grants and mortgage holidays are due to be extended – check out our main support hub for more information.
The full HMRC guidance on CJRS can be found here.