What was initially heralded as a short term 3-month support scheme for employers will now be extended into a second year with Chancellor Rishi Sunak announcing a continuation of the Coronavirus Job Retention Scheme (CJRS), or the furlough scheme as it is more commonly known, until the end of April 2021.
Bringing forward a review of potential changes to employer contributions from January, the Chancellor confirmed that the Government contribution would remain at 80% of the salary of employees for hours not worked (up to a maximum of £2,500 per month), with employers responsible for all National Insurance Contributions (NICs) and pension contributions plus wages for worked hours.
At least payroll teams will be relieved that there are no further changes to eligibility for the scheme or the underlying calculations, which are often already complex.
Key furlough scheme dates
There continue to be 14-day time limits on submission of claims which are:
- 14 January 2021 – final date to submit claims for December 2020 by 11:59pm
- 15 February 2021 – final date to submit claims for January 2021 by 11:59pm
- 15 March 2021 – final date to submit claims for February 2021 by 11:59pm
- 14 April 2021 – final date to submit claims for March 2021 by 11:59pm
- 14 May 2021 – final date to submit claims for April 2021 by 11:59pm.
HMRC may consider accepting claims beyond these deadlines if there is a ‘reasonable excuse’ for late submission, but this should certainly not be relied upon.
Holiday period clarification
With the holiday period coming up, an important clarification from HMRC is that if employers have furloughed employees because of the effect of coronavirus on their business, they can claim under CJRS for periods of paid leave they take while on furlough, including for bank holidays such as Christmas Day or Boxing Day. This doesn’t mean that employees can be placed on furlough merely because they have booked a period of leave. Furloughed employees taking holiday must have their pay topped up to their normal rate in line with the Working Time Regulations.
Publicly available information
Employers utilising the CJRS scheme should note that if furlough grant monies are claimed for periods starting on or after 1 December 2020, HMRC will publish their names and an indicative value of claims on the GOV.UK website as part of their commitment to transparency and to deter fraudulent claims. Due to be available from February, published information will include the employer name; the banded range within which the value of the claim falls; and the company or LLP registration number if applicable. The lowest ‘band’ covers claims with a value of £1 to £10,000, then £10,001 to £25,000, £25,001 to £50,000 £50,001 to £100,000 with increasingly large bands thereafter until the top tier of £100,000,001 and above. Individual employees will also be given access to furlough claims made for periods starting on or after 1 December 2020 in respect of their employment, via their personal tax accounts.
A note about redundancies
As previously signposted by the Government, it has now been confirmed that CJRS claims cannot be made for any periods of notice (whether statutory or contractual) running from 1 December 2020 – so employees cannot be placed on notice of redundancy whilst a claim is being made for them under the CJRS. This also means that employees on notice for reasons other than redundancy cannot be the subject of furlough grant claims.
If you need help with this, please get in touch with your usual Sagars team member or contact our payroll manager, Andrew Senior.