02 Nov 2020 11:08 AM

At a news conference on Saturday PM Boris Johnson announced his plans for a four week lockdown across England. Today he will formally address MPs in the House of Commons on his plans; MPs will then vote on the lockdown on Wednesday 4th.

The second lockdown is due to run in England from 12.01am on Thursday November 5th until Wednesday 2nd December.


People and businesses in the UK are being provided with additional financial support, by an extension of the Coronavirus Job Retention Scheme (CJRS) commonly known as the Furlough Scheme.


It was the Government’s initial intention to bring in a new Job Support Scheme (JSS) from Sunday 1st November, this has now been postponed until the Furlough Scheme ends.


The Furlough Scheme will remain open until December with employees receiving 80% of their current salary for hours not worked, up to a maximum of £2,500.


Under the extended scheme, the cost for employers of retaining workers will be reduced compared to the current scheme, which ends today. This means the extended Furlough Scheme is more generous for employers than it was in October.


Businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time, and will only be asked to cover National Insurance and employer pension contributions which, for the average claim, accounts for just 5% of total employment costs.


This is a return to the same level payment that employers made in August. The rationale for this may be that most non-essential businesses are being required to close as a result of this second lockdown, and so need support.


Employees
• To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.

As under the current CJRS rules:
• Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees.
• Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Such calculations will broadly follow the same methodology as currently under the CJRS.
• When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days.
• Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
• For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.


What support is being provided and employer costs:
• For hours not worked by the employee, the government will pay 80% of wages up to a cap of £2,500. The grant must be paid to the employee in full.
• Employers will pay employer NICs and pension contributions, and should continue to pay the employee for hours worked in the normal way.
• As with the current CJRS, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
• The Government will confirm shortly when claims can first be made in respect of employee wage costs during November, but there will be no gap in eligibility for support between the previously announced end-date of CJRS and this extension.


We will be issuing updates on future announcements. If you have any questions on the extended Furlough Scheme please contact us.