Job Retention Scheme Extended Until March 2021

With the UK Government’s recent announcements of new lockdown measures being introduced in England, the Job Retention Scheme (JRS) has officially been extended through to the end of March 2021, meaning furlough is now once again an option for those UK businesses which have been adversely affected by the pandemic.

The claimable figure has also been raised back to its earlier 80% rate, similar to that of the March – August period, meaning employers can once again claim up to 80% of employees unworked hours to a cap of £2,500 per month, however, National Insurance and Pension contributions will still not be available to claim, similar to the August, September, and October claim periods.

Flexible furlough will continue to be an option for those businesses that are fortunate enough to be able to have staff in work part-time, with the scheme covering those additional hours unworked.

The scheme will be operated via the same HMRC portal as before, however the calculations for employees will be managed in a different way, with a specific process now in place for employees on variable pay and for those on fixed pay amounts.

The claim calculations will be done in two different ways depending on how the employee’s salary is decided.

For employees who have fixed pay:

You will have to identify the reference period that will be used to work out the employee’s usual wages. The reference period is the last pay period ending on or before the 19th March 2020 for employees who either:

– Were on your payroll from the 19th March 2020, that you made a payment of earnings to them in the tax year 2019 to 2020 which was reported to HMRC on an RTI or FPS on or before the 19th March 2020.
– You made a valid JRS claim for in a claim period ending any time on or before the 31st October 2020.

For employees who have variable pay, the calculations will depend on when they were on the payroll:

Employees who were on the payroll from the 19th March 2020, that you made a payment of earnings to in the tax year 2019 to 2020 which was reported to HMRC on an RTI or FPS on or before the 19th March 2020, you should calculate 80% of the higher of:

– The wages earned in the corresponding calendar period in the tax year 2019 to 2020
– The average wages payable in the tax year 2019 to 2020

This also applied to employees for whom you made a valid furlough claim in a claim period ending any time on or before the 31st of October 2020.

For all other employees you should calculate 80% of the average wages payable between 6th April 2020 (or, if later, the date the employment started) and the day before they are furloughed on or after the 1st of November 2020.

All employers with a UK Bank account and UK PAYE scheme can claim the grant – and for this next round of furlough, neither the employer nor the employees need to have previously claimed under the CJRS.

For employees to be eligible, they must meet the following criteria as set out by the Government:

  • They must be on an employer’s PAYE payroll by 23:59 on the 30th of October 2020, which means an RTI submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.
  • They can be on any type of contract. Part-time, full-time or flexible included.
  • When claiming for this round of JRS funding, the employers will need to report and claim for a minimum period of 7 consecutive calendar days.

As always, Qualitas will continue to provide updates in line with the Government’s information being released.