This blog was last updated on 5 November, following further announcements by the Chancellor.
On Saturday 31 October, the night before the Job Support Scheme was due to come into play, the Chancellor announced that the Coronavirus Job Retention Scheme (CJRS) would be extended for one month to help businesses through the national lockdown. On 4 and 5 November, additional announcements were made regarding the further extension of the CJRS, increased support for self-employed workers as well as other extended measures. We’ve put together some initial FAQs to provide clarity around what financial support is now available.
What does the extended CJRS look like?
The extended furlough scheme will now run to 31 March 2021, subject to a review in January, and will mirror levels available under the CJRS in August:
– the government will pay 80% of wages up to a cap of £2,500
– employers will pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work
We await confirmation as to when claims can first be made for employee wage costs during November, but understand that there will be no gap in eligibility for support between the previously announced end-date of the CJRS (31 October) and this extension.
Will the extended grant be flexible?
Yes – The scheme with continue as ‘flexible furlough’ i.e. Businesses will have the flexibility to bring furloughed employees back to work part-time or furlough them full-time.
Who is eligible for the extended CJRS?
- All employers with a UK bank account and UK PAYE schemes can claim the grant.
- Neither the employer nor the employee needs to have previously used the CJRS.
- To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30th October 2020. This means a RTI submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.
Can I bring back employees that have been made redundant, and place them on furlough?
Yes – but there’s only a small window that enables an individual to qualify. You can re-hire an employee and place them on furlough if they were on your payroll on 23 September 2020 (i.e. notified to HMRC on an RTI submission on or before 23 September) and made redundant thereafter.
Where does this leave the Job Support Scheme (JSS)?
The JSS was due to commence of 1 November but has now been postponed until the extended furlough scheme ends (subject to whether it is still required at that time).
What about the Job Retention Bonus?
Given the extension of the furlough scheme, the Job Retention Bonus is now defunct. We understand that a new retention incentive will be announced at the appropriate time, once the furlough scheme has once again been wound down.
What about the self-employed?
Self-employed support (the SEISS grant) has been increased from 40% of trading profits to 80% for November, December and January (the three month period for which SEISS is calculated), with the maximum grant increased to £7,500. The claims window will open on 30 November (rather than the middle of December, as originally planned).
What other support is still available?
In brief, some of the additional support still available to businesses affected by the pandemic includes:
- Local Restrictions Support Grants (worth up to £3,000 per month). More detail here.
- Access to government-backed loans, including bounce back, CBILS, CLBILS and Future Fund. The deadline for these loans has been further extended to 31 January 2021. A new, successor loan programme is planned to commence in January/February 2021.
- Option to ‘top up’ existing Bounce Back Loans if additional finance is required.
- Mortgage holiday extension.
- Businesses that deferred their VAT will be given the opportunity to spread their VAT bill over 11 payments, with no interest.
How can we help?
We understand that these are challenging and uncertain times, and continue to be available to discuss your current situation and the financial support available. If you have new business concerns following the latest updates, or would like help navigating the support you can access, contact your usual relationship practitioner, email intouch@haroldsharp.co.uk or call us on 0161 905 1616.