Breaking: Government update 31 October 2020 – CJRS being extended until December

Sat 31 Oct 2020

On Halloween, the Prime Minister announced a national lockdown that will be in place from Thursday 5^th November until Wednesday 2^nd December, closing non-essential shops, pubs, restaurants and cafes.

In addition to this, he also provided a key update that the Coronavirus Job Retention Scheme (CJRS), originally put in place in March would continue and be extended until December for all UK businesses. Therefore, it is not closing on 31 October as was originally planned, and the Job Support Scheme will not go live from 1 November.

What does this all mean?

This means we are going “Back to the Future”:

• CJRS has been extended. The extension in place mirrors the support that was available to employers in August under CJRS – i.e. receive 80% of qualifying pay (up to £2,500 per month). 

• Employers 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) are now not going ahead until at least December. You can read more about these arrangements here and here.

• Additionally, business premises forced to close in England are to receive grants worth up to £3,000 per month under the Local Restrictions Support Grant.

What should employers do next?

Employers should:

1. Update their agreements with employees to ensure employees are clear on what is happening both with their working obligations and their pay levels;
2. Communicate to workers the changes taking place and the extension of CJRS – this will be particularly important where JSS has already been communicated to help manage any confusion and reduce the complexity.
3. 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 is a sensible and welcome announcement by the Government. Many businesses could not see how JSS could be used in a climate of growing concern, increasing tier three lockdowns as well as the additional eligibility testing and administration required that came with JSS.

Therefore, by extending CJRS, an arrangement most have become familiar with, at its original rate of funding (80%), it gives many the protection to furlough workers in viable jobs at salary levels that allow people to continue to get by.

Get in touch

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

We will provide more details as they get announced.

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