Over the weekend, we saw a significant amount of change in relation to the Government's Coronavirus support package for employers and employees. Initially, the Job Support Scheme (JSS) was due to be launched on Sunday 1 November, but has now been postponed due to the forthcoming lockdown in England (from 5 November until at least 2 December). As a result, the Prime Minister announced an extension of the Coronavirus Job Retention Scheme (CJRS), for the “month of November” but with some important changes to the original CJRS scheme. The availability of support under this extended scheme is welcome news for affected employers.
There are more details expected from HMRC over the next few days, which we will keep you up to date with. In the meantime we have set out what we know so far, what is still to be decided and the actions employers should be taking now based on our experience.
A summary of the key points:
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The Government has instructed certain businesses to close and the operations of many businesses will be impacted.
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The new JSS has been delayed until “the furlough scheme ends”.
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Under CJRS employees will receive 80% of their wages up to a cap of £2,500 for their usual hours not worked.
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All employers with a UK bank account and a UK PAYE scheme impacted can claim the grant. Importantly neither the employer nor the employee needs to have previously used CJRS to be eligible for this extension.
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The calculations will broadly follow the same methodology as currently under the CJRS.
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Eligible employees must be on an employer’s PAYE payroll by 23:59 on 30th October 2020. A Real Time Information (RTI) submission notifying payment for the employee must have been made on or before 30th October 2020.
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As was the case for claims made under CJRS in August, employers can choose to top up employees wages and must pay as normal for hours worked.
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While businesses will still be able to claim upfront, the Government anticipates a short period when payments will need to be paid in arrears while the necessary guidance, claims system and legislation is updated.
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Flexible furlough will continue to be an option in addition to full-time furlough.
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Claims for furloughed hours must be for a minimum of 7 consecutive calendar days.
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The government will pay 80% of employee’s wages for the hours not worked up to a cap of £2,500 per month and employers will pay employer National Insurance (NICs) and auto enrolment pension contributions.
We are awaiting further information around a number of points, in particular:
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How “usual hours” and “reference salary” will be calculated, and whether the reference periods will, as under the draft JSS, be extended to cover periods post 19 March 2020.
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What this change means for the 30 November deadline for making any claims under CJRS covering periods from 1 July to 31 October.
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Whether changes will be made to the Job Retention Bonus.
With respect to these announcements businesses should:
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Consider the appropriateness of making a claim and the reputational and stakeholder impact of doing so.
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Identify any employees that are not eligible for this new scheme, broadly those that were not included in an RTI return submitted on or before 30 October.
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Consider the impact of the extension on existing plans for proposed workforce changes.
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Plan for the end of this extension and the introduction of the JSS.
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Consider how best to communicate to your employees what is known, what your plans are and how you will be cascading updates.
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Begin to collect data on “usual hours” and “reference salary” so you are best placed to calculate the claims that can be made and what can be reclaimed in the first few weeks.
In light of these, and further anticipated, developments we will be refocusing our next virtual Employment event on Tuesday 10 November. We will be looking at the details of this extension, the CJRS compliance and enforcement regime, what actions need to be taken to claim the Job Retention Bonus and some of the developments on the Job Support Scheme. This seminar will take place virtually and you can register today.
We will continue to keep you updated on these fast moving developments and encourage you to ensure you’ve had a health check of your existing CJRS claims processes and controls and fully understand this extension and its impacts. Please do not hesitate to reach out to your usual PwC contact to discuss next steps and the options available.
