Furlough Is Back!

It is said that a week is a long time in politics… maybe it’s best not to broach that in the week that it’s been Stateside.

But a week is a long time in the world of accountancy too. When we posted our JSS blog last Friday afternoon, little did we know that a week down the line, JSS would be suspended, JRS would be back on the table and the furlough contribution would be back up to 80%.  This latest development will no doubt bring some form of reprieve to employers and their staff who continue to struggle with the challenges of a global pandemic.

We have set out a summary below of what we know to date.

 

Furlough – What has Changed?

The Coronavirus Job Retention Scheme (CJRS) which had been due to end on 31 October 2020 will now run to 31 March 2021. However, the scheme is subject to review at the end of January 2021 at which time the government may decide to alter their 80% contribution to the scheme.

This extension to the CJRS means that the planned move to the Job Support Scheme as mentioned in the Winter Economy Plan will not happen at this time. The previously announced plan to provide a job retention bonus to Employers has also now been scrapped.

Under the terms of the extension to the CJRS scheme, the government will pay 80% of an employee’s gross salary for hours not worked up to a cap of £2,500 per month (the £2,500 cap is proportional to hours not worked). Employers will be required to cover the cost of both Employer’s NIC and Employer’s Pension Contributions. Employers may decide to top up their employees to the full pay but they are not obliged to do so.

 

Eligibility for Extended CJRS Scheme

 To be eligible to make a claim on the scheme:

• The employee must have been on Employer’s Payroll on 30 October 2020;
• The employer must have made an RTI submission to HMRC between 20 March 2020 and 30 October 2020 in respect of any employee being furloughed;
• The employer does not need to have used the scheme previously to qualify and employees do not need to have been furloughed previously to qualify; and
• Employees do not have to be on fixed term contract as the furlough scheme also covers zero hour and temporary contracts.

 

Open for Applications

The Job Retention Scheme will open for applications on 11 November 2020 and will close for November applications on 14 December 2020.

We will share further updates on the scheme as they are published.

 

For further information contact Gildernew & Co. at info@gildernewandco.com or by telephone on 028 8772 4697. Read more of our Blog Insights here. 

 

Gildernew & Co. Ltd make every effort to ensure the accuracy of the information herein.   However, no reliance should be placed on any of the above without seeking independent professional accountancy, legal and/or financial advice.