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Extension of the Job Retention Scheme

Nick Irvin, Manager, Employment Tax and Andy Hamman, Director, Employment Tax 
16/11/2020
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On 31 October 2020, Boris Johnson announced that the country would move into a second national lockdown from 5 November until 2 December 2020.

On 5 November 2020 the government announced that the Coronavirus Job Retention Scheme (CJRS) – also referred to as the Furlough Scheme – will now be continuing throughout the period 1 November 2020 to 31 March 2021.

The Job Support Scheme (JSS) will be postponed until further notice.

In addition, the Job Retention Bonus (JRB) planned for February 2021 has also been cancelled, but may be revived at a later date.

As a result, the government have announced that the Coronavirus Job Retention Scheme (CJRS) – also referred to as the Furlough Scheme – will be continuing from 1 November 2020, and the Job Support Scheme (JSS) will be postponed until further notice.

The CJRS will continue from 1 November until 2 December 2020, but may be extended in line with any extension of the national lockdown restrictions.

How much can be claimed?

Under the newly extended CRJS from 1 November 2020, employers will be able to claim for 80% of an employee’s wages (capped at £2,500 pro rata) for any hours that they do not work. The 80% grant will be reviewed in January 2021.

The employer will be required to fund 100% of wages for any hours actually worked, as well as all employer National Insurance Contributions (NICs) and pension contributions – this replicates the level of support provided in August 2020 under the scheme.

Employers are free to top up wages for hours not worked to 100% if they wish.

Who is eligible?

All UK employers with a UK bank account and UK PAYE scheme can claim through the CJRS (except those who are fully publicly funded).

To be eligible under the extended scheme, an employee must have been on an employer’s PAYE payroll at 23:59 on 30 October 2020. And a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made between 20 March 2020 and 30 October 2020.

Employees who have started their employment since March and/or haven’t previously been furloughed can be claimed for under the scheme.
 
Employees made redundant since 23 September 2020 can be re-employed and included in claims, subject to being on the payroll on 23 September 2020 and included on an RTI submission between 20 March and 23 September 2020. 

For claim periods starting on or after 1 December 2020, employers cannot claim for any days on or after 1 December 2020 during which the furloughed employee was serving a contractual or statutory notice period for the employer (this includes people serving notice of retirement or resignation).

Claim process

Claims will need to cover a minimum period of seven days. Submission of claims opened on 10 November 2020. All claims must be for the same calendar month and each claim must be submitted by the 14th day of the following month (unless that falls on a weekend, in which case it is the next working day). 

If an employer underclaims through the scheme, they can only amend the claim up to 28 days after the month to which the claim relates (unless that falls on a weekend, in which case it is the next working day).

For claims for December onwards, HMRC will publish employer names, an indication of the value of the claim and, for companies and Limited Liability Partnerships (LLPs) the company registration number of those who have made claims under the scheme.

With multiple wage support schemes being announced, all taking different forms, below helps summarise the support that has been, is and will be available to employers throughout the pandemic.

HMRC will also be improving the information available to furloughed employees by including details of claims made for them, (for claim periods starting on or after 1 December 2020) in their Personal Tax Account on GOV.UK.

Summary of the wage support schemes

March to June 2020 - CJRS
Employers can claim
for 80% of wage costs plus associated employer NICs and pension contributions.
July 2020 - CJRS 
Flexible furlough option: Employees can work part-time and claim 80% of wages plus the associated employer NICs and pension contributions for hours that the employee doesn't work. 
August 2020 - CJRS
The claim stays at 80%
of wage costs, but no longer covers employer NICs or pension contributions.
September 2020 - CJRS
The claim amount reduces to 70% of wage costs.
October 2020 - CJRS
The claim amount reduces to 60% of wages costs
November 2020 - Extension of CJRS
Claim amounts revert back to the amounts in August 2020.
March to June 2020 - CJRS
Employers can claim
for 80% of wage costs plus associated employer NICs and pension contributions.
July 2020 - CJRS 
Flexible furlough option: Employees can work part-time and claim 80% of wages plus the associated employer NICs and pension contributions for hours that the employee doesn't work. 
August 2020 - CJRS
The claim stays at 80%
of wage costs, but no longer covers employer NICs or pension contributions.
September 2020 - CJRS
The claim amount reduces to 70% of wage costs.
October 2020 - CJRS
The claim amount reduces to 60% of wages costs
November 2020 - Extension of CJRS
Claim amounts revert back to the amounts in August 2020.
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HMRC checks

HMRC has the authority to check claims for all wage support schemes.

Grants may be withheld or need to be paid back if any claim is found to be fraudulent, based on incorrect information or calculated incorrectly. 100% penalties can and will be applied where appropriate.

Grants for the CJRS can only be used as reimbursement for wage costs actually incurred.

Employers must agree any changes to working arrangements with their employees, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request.

It is important that all claims are valid and are calculated in accordance with the guidance. HMRC has the ability to charge penalties of up to 100% and can also use criminal powers for fraudulent claims. Even in cases of innocent mistakes, employers will be required to pay back any amounts that have been overclaimed.

How can Crowe help?

Crowe can assist with calculating the amounts to claim under the CJRS (or any other wage support scheme) and/or submitting the claims on your behalf, as well as any other ad hoc queries relating to the schemes.

Crowe can also offer a checking service to review claims that have already been submitted to ensure they are accurate.

If you would like any assistance with the extension of the CJRS, please speak to your usual Crowe contact.

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Caroline Harwood
Caroline Harwood
Partner, Head of Share Plans and Employment Tax
London