On Friday afternoon the government issued some updates to the guidance on the Coronavirus Job Retention Scheme (CJRS) and published new guidance for the Job Retention Bonus (JRB) alongside how it will interact with the new Job Support Scheme (JSS). The following information is a summary of the most important points to be aware of.
Coronavirus Job Retention Scheme: cut-off dates and requirement to correct
The CJRS will come to an end on 31 October 2020. HMRC have now confirmed in the latest update to their guidance that there will be a cut-off date for claims and corrections of 30 November 2020 (this is also reflected in a new Treasury Direction). After this date, employers will no longer be able to submit new CJRS claims or make corrections which would increase previous claims. Employers therefore now have a firm deadline by which to submit their final claims and ensure that all of their previous CJRS claims are complete.
We understand that it will still be possible to make a correction and repay a CJRS overclaim after 30 November. However, employers need to remember that there is a statutory requirement to either make a repayment of overclaims or notify HMRC of such overclaims by 20 October 2020 (or within 90 days of the overpayment, e.g. for CJRS overpayments received after 22 July 2020). A failure to check for inadvertent overclaims and deal with them appropriately by these deadlines can trigger penalties and interest charges in addition to the requirement to repay the overclaimed amounts themselves.
HMRC are now in the midst of many CJRS reviews, and our recent update confirms the action you should take if you receive any correspondence from HMRC on this.
Job Retention Bonus: interaction with Job Support Scheme
HMRC has now also released guidance on the JRB (in addition to the new Treasury Direction which constitutes the legislative framework for how the JRB will operate). The JRB is a one-off payment payable to employers for employers, of £1,000 per previously furloughed employee who continues to be employed until the end of January 2021, and receives taxable earnings in each of the three tax months from 6 November 2020 – 5 February 2021 inclusive, totalling at least £1,560 gross (the “minimum income threshold”).
If HMRC are still checking your CJRS claims, you can still claim the JRB but your payment may be delayed until those checks are completed. HMRC will not pay the bonus for an employee if you made an incorrect CJRS claim and your employee was not eligible for the CJRS at any time.
Friday’s update also confirms that the JRB and the new Job Support Scheme (JSS) are not mutually exclusive, i.e. any payment of earnings to employees claimed under the JSS can be taken into account in determining whether the minimum income threshold has been met for an employee.
Job Support Scheme
Apart from the point regarding the interaction with the JRB, the guidance released today does not give any further details about the new JSS beyond that previously published detailing that the JSS will provide ongoing wage support for people in work, provided that the employer meets certain access conditions, the employee is working at least 33% of their usual hours, and the employer also provides additional wage support. It will start on 1 November and continue for 6 months until the end of April 2021.
In terms of the employer access conditions, all employers with a UK bank account and UK PAYE schemes can claim the grant subject to the size restrictions set out below and neither the employer nor the employee needs to have previously used the CJRS.
Large businesses will have to meet a financial assessment test, so the scheme is only available to those whose turnover is lower now than before experiencing difficulties from Covid-19. There will be no financial assessment test for small and medium enterprises (SMEs).
HMRC’s expectation is that large employers using the Job Support Scheme will not be making capital distributions, such as dividend payments or share buybacks, whilst accessing the grant.
The government have produced a factsheet on the JSS criteria, and further details are expected in guidance format on the JSS in the coming weeks.