Updated 17 December 2020
Extended Coronavirus Job Retention Scheme (CJRS)
Q1. What is the CJRS?
A. The CJRS (better known as the furlough scheme) provides businesses across the UK with financial support in response to the Government’s response to the coronavirus outbreak. This has been extended until the end of April 2021.
Q2. What will the Government pay?
A. Employees will receive 80% of their current salary for hours not worked, up to a maximum of £2,500 until April 2021.
Q3. What will Employers pay?
A. Employers pay employer National Insurance Contributions and pension contributions only for the hours the employee does not work. They should continue to pay the employees for hours worked in the normal way.
Q4. What Employers are eligible?
A. All employers with a UK bank account and UK PAYE scheme can claim.
Q5. What Employees are eligible?
A. To be eligible, employees must be on their employer’s PAYE payroll by 23:59 on 30th October 2020. A Real Time Information submission notifying payment for that employee to HMRC must have been made on or before this date. Employees can be on any type of contract and employers are able to agree any working arrangements with their employees. Employees employed and on the payroll on 23 September 2020 who were made redundant or stopped working after that date can be re-employed and claimed for.
Q6. What if Employees cannot work due to Covid or other work conditions?
A. Employees can be furloughed if they are unable to work because they:
- Are shielding in accordance with public health guidance or need to stay at home with someone who is shielding; or
- Have caring responsibilities resulting from coronavirus, including looking after children.
Q7. Do Employers need to claim for a minimum period?
A. Yes, they need to report and claim for a minimum period of 7 consecutive calendar days. They will need to report hours worked and the usual hours the employee would have been expected to work in the claim period.
Q8. Do Employees have to have been furloughed before?
A. No, they do not need to have previously used the CJRS.
Q9. Can my Employees work during the scheme?
A. Yes, business have the flexibility to allow employees to be furloughed and work part time or be on full-time furlough. Flexible furlough agreements can last any amount of time, but the period claimed for must be for a minimum claim period of 7 consecutive calendar days.
Q10. Can Employers pay more?
A. Yes, employers can top up employee wages above and beyond the scheme grant at their own expense.
Q11. How do I calculate Employees’ reference pay?
A. Employees who have previously been furloughed will have their reference pay and hours based on the current calculations.
If employees have not been furloughed previously, they will have a different pay and hours reference period based on:
- Fixed wages – 80% of the wages payable in the last pay period ending on or before 30 October 2020; or
- Variable wages – 80% of the average payable between the start of their employment or 6 April 2020 inclusive (whichever is later) and the day before the CJRS extension furlough period begins.
Q12. Further information about making a claim
A. Employers must report and claim for at least 7 calendar days. They will need to report actual hours worked and the usual hours and employee was expected to work in a claim period. Employers will pay employees for hours worked as usual.
The claim period must start and end within the same calendar month, however if there are days in more than one month then more than one claim should be made and calculated separately.
Q13. Do employers need to put in place an agreement with employees?
A. To be eligible for the grant, employers must have confirmed to employees that they have been furloughed. Any such agreement should be in writing and kept for 5 years, and records should be kept of how many hours the employees work and how many hours they are furloughed for 6 years.
CORONAVIRUS JOB RETENTION BONUS
Q. What is it?
A. The Job Retention Bonus was a £1,000 one off taxable payment to an employer, for each eligible employee furloughed and employed continuously until 31 January 2021. It has been withdrawn for now and the Government has confirmed that it will be replaced with a new ‘retention incentive’ at the appropriate time. A new incentive has not yet been announced.
THE EXTENDED SELF-EMPLOYMENT INCOME SUPPORT SCHEME (SEISS)
Q1. What is the SEISS?
A. The SEISS is designed to help self-employed individuals (including members of partnerships) whose trade has been adversely affected by the pandemic, and the Government has extended this scheme.
Q2. When does the extended SEISS end?
A. The extension will last for six months, from 1 November 2020 until the end of April 2021.
A. Individuals are eligible if they were previously eligible for the SEISS first and second grant (although they don’t have to have claimed the previous grants), namely if:
- They traded in the tax year 2018 to 2019 and submitted a self-assessment tax return on or before 23 April 2020 for that year;
- They traded in the tax year 2019 to 2020; and
- They intend to continue to trade in the tax year 2020 to 20201,
and they intend to continue to trade and either they:
- are currently actively trading but are impacted by reduced demand due to the coronavirus; or
- were previously trading but are temporarily unable to do so due to the coronavirus.
Note that to be eligible, trading profits must be no more than £50,000 and at least equal to non-trading income. HMRC will look at the figures from the 2018-19 tax return in the first instance or, if the individual is not eligible based on these figures, they will then consider the average over 2016-17, 2017-18 and 2018-19 (if available).
Q4. How will it work in practice?
A. The extended SEISS will come in the form of two further taxable grants:
- A first grant will cover the period from 1 November 2020 until 31 January 2021 at 80% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits and capped at £7,500 in total.
- A second grant will be available covering the period from 1 February 2021 until the 30 April 2021, but the amount for the second grant has not yet been set by the Government.
The grants are subject to income tax and NIC.
Q5. How to claim?
A. Individuals will be able to make a claim online through Gov.uk and HMRC will provide full details about claiming and applications for the extended SEISS in due course. The online service for the next grant will be available from 30 November 2020.
We will update this Q&A as and when further guidance is published.