Further extension to the Furlough Scheme announced

Hot on the heels of the Chancellor’s announcement last week that the Coronavirus Job Retention Scheme (“CJRS”) would continue until 2 December 2020, comes a further announcement that the CJRS has been extended to 31 March 2021 and confirmation that the CJRS extension will apply in Northern Ireland.

As was the case in August 2020, the Government will pay 80% of wages for hours not worked, up to a cap of £2,500, and employers will pay National Insurance and pension contributions for those hours.  The Job Retention Bonus will not now be paid in February, however a retention incentive may be introduced at a later date.

Further guidance will be published next week but in the meantime, the key takeaways from the HMRC Policy Paper are as follows:

• The employer and the employee don’t have to have previously claimed or have been claimed for under the CJRS to make a claim under the extended CJRS.
• Employees can continue to work, flexible furlough will continue.
• Employees must have been on PAYE payroll on 30 October 2020 but employees made redundant or who stopped working after 23 September 2020 can be re-employed and claimed for.
• Employees can be furloughed if they are shielding in line with public health guidance.
• Claims can be made from 8am on 11 November 2020.
• November claims must be submitted no later than 14 December 2020.
• The proposed Job Support Scheme is on hold.
• The extended CJRS will be reviewed in January to decide whether economic circumstances are improving enough to ask employers to contribute more.
• Further information will be published on 10 November 2020.

In addition to the extension of the CJRS, the Chancellor also announced that the Self Employed Income Support Scheme (SEISS) will be increased to 80% from November to January for all parts of the UK.  The grant will be calculated based on 80% of 3 months’ trading profits and paid out in a single instalment capped at £7,500.

Whilst the economic challenges posed by Covid-19 continue, the Chancellor’s latest announcement will be welcomed by many employers and self-employed individuals across the UK.

This article has been produced for general information purposes and further advice should be sought from a professional advisor. Please contact our Employment Team at Cleaver Fulton Rankin for further advice or information.