Reintroduction and Extension of the Coronavirus Job Retention Scheme
On Thursday 5 November 2020 the Chancellor has announced that Coronavirus Job Retention Scheme (CJRS) will be extended until the end of March 2021, although the government will review the policy in January. The CJRS was due to be replaced by the Job Support Scheme (JSS, please also refer to our October Newsletter "The Job Support Scheme - Additional Measures") on 1 November as the government had initially resisted pressure from unions, business groups and political parties to extend the CJRS. However, almost immediately after the announcement of month-long lockdown commencing on 5 November 2020, the CJRS (the "furlough scheme") was initially reintroduced until December and then extended to 31 March 2021.
This newsletter also provides details of other measures announced including the extension of the Self-Employment Income Support Scheme (SEISS).
We will continue to monitor any relevant development/announcement, therefore please speak to your usual Statura contact should you wish to discuss in more detail the content of this document or indeed the way in which the Covid-19 outbreak is affecting your business.
Extended CJRS details and eligibility criteria
This extended CJRS will operate as the previous scheme did, with businesses being paid to cover wages costs. As under the previous CJRS, flexible furloughing will be allowed in addition to full-time furloughing.
The level of the grant will mirror levels available under the CJRS in August, so for claim periods up to and including January 2021 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. Employers will have to pay the employee’s wages for the hours they work as normal.
Employers do not need to have used the CJRS previously and can claim whether their businesses are open or closed.
The government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.
Employers can claim for employees who were employed and on their PAYE payroll at the end of October 2020 and employees do not need to have been furloughed under the CJRS previously.
Employers will have flexibility to use the scheme for employees for any amount of time or shift pattern, furloughing employees on either a full-time or part-time basis, and will be able to vary the hours worked in agreement with the employee. As under the current CJRS rules, employees can be on any type of employment contract.
Employees can also be furloughed where they are unable to work because they:
- are shielding in line with public health guidance (or need to stay at home with someone who is shielding);
- have caring responsibilities resulting from coronavirus, including employees that need to look after children.
Employer – employee agreement
To be eligible for the grant, employers must have confirmed to their employee (or reached collective agreement with a trade union) in writing that they have been furloughed or flexibly furloughed. Employers must:
- make sure that the agreement is consistent with employment, equality and discrimination laws;
- keep a written record of the agreement for 5 years;
- keep records of how many hours their employees work and the number of hours they are furloughed for 6 years.
The terms of any agreement must:
- reflect the hours the employee has actually worked or not worked over the period of the agreement;
- allow the employer to satisfy the terms of CJRS so they can make a claim in relation to hours not worked.
The employee does not have to provide a written response and employers do not need to place all their employees on furlough.
Where consistent with employment law, any flexible furlough or furlough agreement made retrospectively that has effect from 1 November 2020 will be valid for the purposes of a CJRS claim as long as it is made according to the conditions above. Only retrospective agreements put in place up to and including the 13 November 2020 may be relied on for the purposes of a CJRS claim.
Other relevant measures announced
Job Retention Bonus
The Job Retention Bonus (JRB, please also refer to our October Newsletter "The Job Support Scheme: Announcement of Additional Measures") will not be paid in February 2021 and a retention incentive will be deployed at the appropriate time.
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.
Support for self-employed
The Self-Employment Income Support Scheme (SEISS) grant has been extended in the form of 2 further grants (the third and the fourth grant), each available for 3-month periods covering November 2020 to January 2021 and February 2021 to April 2021.
To be eligible for the grant extension self-employed individuals, including members of partnerships, must:
- have been previously eligible for the SEISS first and second grant (although they do not have to have claimed the previous grants);
- declare that they intend to continue to trade, and either are currently actively trading, but are impacted by reduced demand due to coronavirus, or were previously trading, but are temporarily unable to do so due to coronavirus.
The third grant will cover a 3-month period from 1 November 2020 until 31 January 2021. The Government will provide a taxable grant calculated at 80% of 3 months average monthly trading profits, paid out in a single instalment and capped at £7,500 in total. This is an increase from the previously announced amount of 55%.
The Government has already announced that there will be a fourth grant covering February 2021 to April 2021. The Government will set out further details, including the level, of the fourth grant in due course.
The grants are taxable income and also subject to National Insurance contributions.
The window for claiming the third grant will open on a phased basis from 30 November and HMRC expects to pay grants within six working days of the date of the claim.
Mortgage payment holidays will no longer end now. 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.