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Extension of the Job Retention Scheme

Nick Irvin, Manager, Employment Tax and Andy Hamman, Director, Employment Tax 
18/12/2020
Hand on laptop and desk

The government have 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 30 April 2021.

How much can be claimed?

Under the newly extended CRJS from 1 November 2020 to 30 April 2021, employers will be able to claim for 80% of an employee’s wage costs (capped at £2,500 per month pro rata) for any hours that they do not work. 

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).

Can I use CJRS to pay for holiday leave?

HMRC have confirmed that employees can only be placed on furlough if an employer cannot maintain their workforce because their business has been affected by coronavirus, and not just because they are on paid leave. This also applies during any peak holiday periods in late December and early January. If an employee is flexibly furloughed, any time taken as holiday should be counted as furloughed hours rather than working hours.

If a furloughed employee takes holiday, their employer should pay them their normal rate of pay in line with the Working Time Regulations. 

What about notice periods?

For claim periods from 1‌‌‌ ‌December, employers cannot claim CJRS grants for any days that their employee is serving a contractual or statutory notice period, including notice of retirement or resignation.

Can employers re-employ someone and furlough them? 

If employees were on an employers’ payroll on 23 September 2020 (i.e. notified to HMRC on an RTI submission on or before 23 September) and were made redundant or stopped working for them afterwards, they can qualify for the scheme if they re-employ them and then place them on furlough.

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). 

Deadlines for each claim period deadline can be found here.

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).

What information on claims will HMRC publish?

From February 2021, HMRC will publish employer names for claims (for December 2020 onwards), 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. The published value of a claim will be shown within a banded range.

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 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 to April 2021 - Extension of CJRS
Claim 80% of wage costs, but no employers NICs or pension contributions.
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 to April 2021 - Extension of CJRS
Claim 80% of wage costs, but no employers NICs or pension contributions.
Under claims
If you have made a mistake in a claim that means you received too little money, you’ll need to amend it within 28 calendar days after the month the claim relates to – unless this falls on a weekend or bank holiday, in which case the deadline is the next weekday. The deadline to amend claims for employees furloughed in November is Tuesday‌‌ ‌29‌‌ ‌December.
Over claims

If you have claimed too much CJRS grant and have not already repaid it, you must notify HMRC and repay the money by the latest of whichever date applies below:

  • 90 days from receiving the CJRS money you’re not entitled to
  • 90 days from the point circumstances changed so that you were no longer entitled to keep the CJRS grant.
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 interest and 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 over claimed.

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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