CJRS extended and changed for new lockdown

1 November: The Coronavirus Job Retention Scheme (CJRS) has been extended until December, with furloughed employees to receive 80% of salary for hours not worked and businesses asked only to cover National Insurance and employer pension contributions.

In his announcement on 31 October of a new national lockdown for England from 5 November until 1 December, the Prime Minister confirmed that the CJRS has been extended for a further month.

The CJRS was due to have ended after being scaled back to cover 60% of salaries during October.

Details confirmed by the Chancellor reveal that the scheme will retain the flexible element, but the level of government support will return to the levels given in August. In this iteration, furloughed employees will receive 80% of their current salary for hours not worked, up to a maximum of £2,500.

Employers will be able to furlough employees full time or part time, but to be eligible for the grant an employee must have been on an RTI submission made to HMRC before 23.59 on 30 October 2020.

Employers will only be asked to cover employer national insurance and pension contributions for hours not worked. They will continue to pay for hours worked as normal. Employers can top up furloughed staff’s salary to the previously contracted amount if that is what has been agreed with the employee.

The statement from Treasury says: “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.”

ICAEW’s Tax Faculty says that the announcement raises a number of questions.

Businesses and their workers in Wales and Scotland which have already been in full lockdown for some weeks, will be wondering whether there will be any backdated additional support for them.

The systems and legal backing for this new scheme will need some revision and ICAEW will continue to work with HMRC and bring members more information as soon as we can.

In the meantime, the Tax Faculty advises all businesses using the CJRS to keep detailed records of workers’ pay and hours worked so that it will be easier to make the claims once the portal is available.

The statement from the HM Treasury and the Chancellor also confirmed that the Job Support Scheme (JSS) which had been due to launch on 1 November, will not start until the CJRS has closed.