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Furloughed Workers and Job Support Scheme

Updated 5thNovember 2020: Job Retention Scheme Extended

The Coronavirus Job Retention Scheme (CJRS) which has allowed workers to be furloughed and was due to close on 30 November 2020 has been extended and will remain open until 31 March 2021.  This means that the previously announced Job Support Scheme (CJSS) which was due to replace the CJRS has been postponed until further notice.

For claim periods running to January 2021, employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month.  The £2,500 cap is proportional to the hours not worked.  This has not changed from the scheme’s original implementation.

The government has announced it will review the policy in January 2021 to decide whether economic circumstances are improving enough to ask employers to contribute more.

Further detailed guidance on the extended CJRS is provided in the link below: 

Job Retention Scheme factsheet

 

To summarise as simply as possible:

  • Employers do not need to have used the CJRS previously.
  • Employers across the UK can claim, whether their businesses are open or closed.
  • Employers can claim for employees who were employed and on their PAYE payroll on 30 October 2020.
  • Employers contributions during the CJRS extension until January 2021 will be the same as in August 2020, where employers will only be asked to cover National Insurance and employer pension contributions for employee hours not worked.

 

 

Withdrawal of the Job Retention Bonus

The Job Retention Bonus (JRB) will not be paid in February 2021 and a retention incentive will be deployed at the appropriate time.  The purpose of the JRB was to encourage employers to keep people in work until the end of January 2021, however as the CJRS is now being extended to 31 March 2021, the policy intent of the JRB no longer applies. 

 

 

Updated 22nd October 2020: Introduction of the Job Support Scheme

The Coronavirus Job Retention Scheme (CJRS) which has allowed workers to be furloughed will end on 31 October 2020.  The Government has announced that a scheme referred to as the Job Support Scheme will take its place. This new Scheme was originally far less generous than the CJRS, however a revised version has now taken its place which significantly increases the generosity of its winter support schemes.  There are two schemes available which have been summarised below.

Further detailed guidance is provided in the link below:

Job Support Scheme factsheet

 

Scheme 1 - Job Support Scheme ‘Open’ 

To summarise as simply as possible though:

- Scheme has been set up to support businesses that are open where employees are working shorter hours due to reduced demand.

- The employee will need to work and be paid their normal pay for a minimum of 20% of the week / month

- The remaining unworked time will be split as follows

  • 5% of the 80% unworked time will be paid by the employer
  • 61.67% of the 80% unworked time will be covered by a Government Grant
  • 27% unpaid
  • An important change to this scheme is that the employer can top up the employees pay with no impact on the Government Grant being claimed.

 

If an employee ordinarily earnt £1,000 per month gross and was only working 20% of her normal hours the breakdown would be as follows:

  • Paid by employer for hours worked            £200
  • Paid by employer whilst not working          £40
  • Grant received from Government               £493
  • The employee would lose £267 as unpaid
  • The employer’s cost is £240 PLUS the Employers NIC and Pension contributions

 

Assuming the same example but the employee worked 40% of their normal hours the breakdown would be as follows:

  • Paid by employer for hours worked            £400
  • Paid by employer whilst not working          £30
  • Grant received from Government               £370
  • The employee would lose £200 as unpaid
  • The employer’s cost is £430 PLUS the Employers NIC and Pension contributions

 

Scheme 2 - Job Support Scheme ‘Closed’ 

To summarise as simply as possible though:

- Scheme has been set up to support businesses whose premises are legally required to close as a direct result of coronavirus restrictions set by the Government.

- The scheme includes premises restricted to delivery or collection-only services from their premises and those restricted to providing food and/or drinks outdoors.

- For JSS ‘Closed’ the employer and Government split is as follows

  • 66.67% of employee’s usual wages for time not worked up to a maximum of £2,083.33 per month will be covered by a Government Grant.
  • Employers will not be required to contribute.
  • Employers can top up the amount paid to the employee with no impact on the Government Grant.
  • Employers are responsible for paying all National Insurance and pension contributions.

 

Job Support Scheme – making a claim 

Opening guidance from HMRC states that claims will be open from 8 December 2020 for pay periods ending and paid in November 2020, however more information on how claims can be made will be released by the end of October 2020.

 

 

Updated 15th July 2020: Introduction of the Job Retention Bonus

The government will introduce a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021. The aim of the bonus scheme is to provide additional support to employers so that they can retain their employees. 

To be eligible, employees will need to:

1)     earn at least £520 per month (above the Lower Earnings Limit) on average between the end of the Coronavirus Job Retention Scheme and the end of January 2021 (November 2020 to January 2021).

2)     have been furloughed by the employer at any point and legitimately claimed for under the Coronavirus Job Retention Scheme.

3)     have been continuously employed by the employer up until at least 31 January 2021.

Employers will be able to claim the bonus from February 2021 once accurate RTI data to 31 January 2021 has been received. More information about this scheme will be available by 31 July 2020 and full guidance will be published in the Autumn this year.


Job Retention Scheme: 

Guidance on the support available for furloughed workers has now been published by the government. As you can imagine, this is incredibly detailed as it covers all types of employment and a wide range of scenarios. 

 

Click here to view the government advice on furloughed workers


This scheme is currently live but will be closing to new entrants from 30thJune 2020.  If we hold agent authority for PAYE services, we can make the claim on your behalf.  If we do not hold this authority, then you will need to make the claim through your business’ own HMRC online account.

From 1stJuly 2020, you’ll have the flexibility to bring previously furloughed employees back to work part-time, with the government continuing to pay 80% of wages for any of their normal hours they do not work up to the end of August. After August, the government will reduce their contribution to 70% in September and 60% in October and the employers will then have to pay the remaining amount to make up 80% of the employees’ wages, this will include paying employers national insurance & pension contributions.  

The Scheme has been extended to run from 1stMarch 2020 through to 31stOctober 2020 (previously 30thJune 2020).

So far claims made by our clients have been paid out in six working days in line with the Governments expectation. 

If you wish to check your own calculations HMRC have provided a calculator to assist with this at the link below:


HMRC Job Retention Scheme Calculator

If you have any problems, there is a CJRS Helpline at 0800 024 1222 open Monday to Friday 8am to 4pm.

Naturally, we are experiencing a huge number of enquiries from our clients currently. However, the answers to many of the questions we are being asked, are found within this government guidance. Of course, we are here to support our clients 100% during this time so please do get in touch with us if you have any specific questions at all. 

In theory, directors can be furloughed in the same way as other employees.  However, a condition of furloughing is that the individual must not undertake work of any kind for the company during this time. This is harder for a director to justify, particularly if they are the sole director. In many cases this is impractical and undesirable because the director may wish to use this time working on improving the business so that when trading recommences the business performs well quickly.  In these circumstances, furloughing is not permitted. 

Remember also that this only relates to PAYE income, not dividends.

All furloughed workers should be officially written to by either letter or email advising they have been furloughed. 

ACAS have provided a sample template for you to use/take inspiration from at the link below:

ACAS Letter Template

The furlough agreements should be in writing and it is a good idea to include:

  • the date furlough starts
  • when it will be reviewed
  • how to keep in contact during furlough,
  • a statement that a worker will stay employed while they are furloughed, but they must not work

 

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