Breaking: CJRS being extended until 31 March 2021

Thu 05 Nov 2020

Remember, remember the 5^th of November…

Following our earlier update on Hallowe’en, (please click here) the Chancellor has now gone further and announced that the CJRS Flexible Furlough arrangement will remain in place until 31 March 2021.

Given that this has been extended beyond 31 January 2021, the £1,000 per furloughed worker CJRS bonus payment for employers will be delayed / reviewed at a later date.

What does this announcement mean?

Employers will be able to use CJRS until 31 March 2021.
Employees will continue to receive 80% of their qualifying pay for periods on furlough, capped at £2,500 per month. Employers can choose to top up as they wish.
Employers will receive 80% of the qualifying pay (capped at £2,500 per month) from the Government. This will be reviewed in January. We could therefore see a similar pattern to how CJRS worked between August and October, where the employer support is gradually reduced from 80% to 60%.
Employers anywhere in the UK, whether small or large, charitable or non-profit, are eligible for the extended CJRS arrangement, without needing to meet wider eligibility criteria (i.e. like JSS required).
Businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time (like Flexible Furlough), and will only be asked to cover National Insurance and employer pension contributions.
The Open & Closed Job Support Schemes (JSS) now seem to have been permanently withdrawn for the foreseeable future. You can read more about these arrangements here and here.
Employers will not be able to claim the previously announced £1,000 CJRS bonus for keeping qualifying furloughed employees employed until 31 January. This will be reviewed at a later date.

Full guidance can be found here.

Some important tweaks to be aware of

CJRS claims will need to be made monthly. Employers will need to move quickly too! Claims can be made from 8am Wednesday 11 November for claims for the month of November and must be submitted by 14 December 2020.
Claims relating to each subsequent month should be submitted by day 14 of the following month, to ensure prompt claims following the end of the month which is the subject of the claim.
An employer can claim for employees who were employed and on their PAYE payroll on 30 October 2020. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
Employees that were employed and on the payroll on 23 September 2020 (the day before the Job Support Scheme announcement) who were made redundant or stopped working afterwards can be re-employed and claimed for. The employer must have made an RTI submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.
HMRC will publish details of all employers who make CJRS claims from December onwards under the extended scheme. Full details of this will be within the detailed guidance to be published next week. Therefore, employers need to be mindful of this in respect of their reputation and business behaviours. This is a key change given the struggles and challenges presented with the original CJRS arrangement in relation to abuse of the arrangement and the difficulty in reviewing claims made given that over £40bn has been paid out to date.

What should employers do next?

Employers should:

Update their agreements with employees to ensure employees are clear on what is happening both with their working obligations and their pay levels.
Communicate to workers the changes taking place and the further extension of CJRS – this will be particularly important where JSS has already been communicated to help manage any confusion and reduce the complexity.
Review workforce design and employee reward – we are helping many with Pension Salary Sacrifice and Car/Travel/remote working policy to help reduce costs in the short and longer term.

Mazars View

This gives employers and employees a chance to breathe, giving comfort that jobs can be protected, wages can continue to be protected at original CJRS rates and enabling employers to plan for the future more constructively.

Get in touch

Please do get in touch if you need support with navigating CJRS, deferring tax or communicating reward and pay to employees.

We will provide more details as they get announced.

Please email Ian Goodwin, Employment Tax Director, at Ian.goodwin@mazars.co.uk.