End of Furlough, Start of the new CJSS and the Job Retention Bonus

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A little bit if a warning comes with this blog, its slightly longer than normal but there are a few changes happening in the next few weeks that we think will be useful for you to be aware of.

As always there is lots of useful information on the gov. websites, but remember that information frequently changes and its always best to check that you have the most current update. If you are unsure, fell free to give us a call on 01656 336097 or email at [email protected] .

Another point to note is that Wales is just entered into another phase of lockdown. There are a number of schemes open to these businesses, for example the CRF and ERF fund. We have not covered these in this blog (We will leave that to the experts!)

KEY DATES

End of Furlough Scheme

The current furlough scheme ends on 31^st October. If you are intending to bring employees back from furlough you should write to them to inform them.

The 30^th November is the last date you can submit claims for periods ending on or before 31 October 2020. After this date you will not be able to submit any further claims or add to existing claims.

CJRS (Job Retention) Bonus

Employers who bring staff back from furlough and retain them in employment until the end of January 2021 will qualify for a £1,000 bonus per head payable after 15 February 2021. The key points are listed below.

1. Employers get £1,000 for each employee they bring back to work from furlough which will be paid from February 15^th
2. The bonus payment is for the employer and not the employee.
3. To qualify for the bonus, the employee has to be continuously employed by the employer from the employer's most recent furlough claim through to the end of January 2021.
4. Employers can only claim for employees who earn an average of £520 per month between 1 November 2020 and 31 January 2021. The employee can have earned less than £520 in any month but must have had some earnings in each of the three months that have been paid and reported to HMRC.
5. A bonus will not be paid for any staff serving a contractual or statutory notice period, including a notice of retirement, that started before 1 February 2021, even if they are still employed on 31 January.
6. The bonus amount is the same for each employee irrespective of their salary.
7. Earnings must be accurately recorded through the HMRC Real Time Information (RTI) reporting.

The New Coronavirus Job Support Scheme (CJSS)

This new scheme which replaces furlough opens on 1 November and runs for 6 months. The scheme is designed to protect viable jobs in businesses who are facing lower demand over the winter due to Covid 19, to help keep their staff attached to the workforce

The business will continue to pay its staff for time worked, but the burden of hours not worked will be split between the employer and the Government (through wage support) and the staff (through a wage reduction) allowing them to keep their job.

For every hour not worked by staff, the Government and employer will pay a third each of the usual hourly wage, with the Government contribution capped at £697.92 a month Employers will be able to make a claim online through Gov.uk from December 2020.

Grant payments will be made in arrears, reimbursing the employer for the Government’s contribution, with ER NI and pension contributions remaining payable by the employer.

‘Usual wages’ calculations will follow a similar methodology as for the CJRS.

Staff who have previously been furloughed, will have their underlying usual pay and/or hours used to calculate usual wages, not the amount they were paid whilst on furlough.

Staff cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for them

Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.

Coronavirus Job Support Scheme: Eligibility

Employers

1. All employers with a UK bank account and UK PAYE schemes can claim the grant.
2. Neither the employer nor staff need to have previously used the Coronavirus Job Retention Scheme.
3. Large businesses will have to meet a financial assessment test: the scheme is only available to those whose turnover is lower now than before experiencing difficulties from Covid 19.
4. No financial assessment test for SMEs.

Coronavirus Job Support Scheme: Eligibility

Employees

1. Staff must be on an employer’s PAYE payroll on or before 23 September 2020
2. To support viable jobs, for the first 3 months of the scheme staff must work at least 33% of their usual hours: after 3 months, the Government will consider whether to increase this minimum hour’s threshold
3. Staff can cycle on and off the scheme and do not have to be working the same pattern each month, but each short time working arrangement must cover a minimum period of 7 days

Coronavirus Job Support Scheme: Example

• Connor works 40% of his normal hours
• He receives 40% of his usual salary from his employer for hours worked
• The cost of the remaining 60% of his time not worked is shared equally as 20% for the employer, 20% for the Government and Connor forgoes 20%
• Connor therefore receives 80% of his normal pay and the cost is borne 60% by his employer and 20% by the Government

Extension to the Coronavirus Job Support Scheme

The extension applies only to businesses that are legally required to close their premises as a direct result of local or national restrictions. It will not benefit any of the following businesses, which may also be significantly impacted:

1. Businesses that are legally able to stay open, but whose trade is significantly affected by a local lockdown, such as suppliers to the hospitality sector
2. Businesses that are able to stay open, but experience very reduced demand, such as theatres or cinemas in areas not subject to a local lockdown
3. Businesses that decide to shut because of the reduced demand or broader impact of Covid
4. Businesses required to close by local public health authorities as a result of specific workplace outbreaks