Since the Coronavirus Job Retention Scheme (CJRS) was first thrust upon us just over 10 months ago, it has acted as an unprecedented support mechanism in helping employers and employees across the whole of the United Kingdom cope with the uncertainty in surviving as a business whilst also retaining employees in their jobs. Although all jobs have not been saved, thousands of jobs, have thankfully been saved due to the scheme.
Following on from the Government’s review of the policy in January 2021, the Government confirmed, on Tuesday 25th January, that the CJRS Scheme will be extended out to 30th April 2021, which is effective as of 1st February 2021.
With the extension, there is some amendments to the legislation as set out below:
- For variable paid employees, when processing March and April claims, the comparison is now the higher of March or April 2019 in the corresponding week / month or higher of the 2019/20 average. This will affect the normal hours calculations and further guidance is expected to follow in due course.
- HMRC have also confirmed the approach that employers can take for February 2021 as it isn’t a leap year, unlike 2020.
“HMRC will accept that February 2021 claims for employees with variable pay and a monthly payroll may be based on either the full amount earned in February 2020 or 28/29ths of that amount (to reflect the leap year). HMRC will not challenge either approach.”
- An employer can claim (via the complaints process), noted on the last paragraph, that they think they are eligible for a claim due to:
- An HMRC error (i.e., failure to process an FPS when there is an audit trail showing it was received)
- Unreasonable delays caused by HMRC (i.e., a delay in setting up a PAYE Scheme which meant the RTI return could not be submitted by the relevant deadline)
- New calculation examples are provided to cover the lookback period, these are covered in section 2.10, 3.8 and 3.9.
- Information and examples are provided regarding clarifying the eligibility of annual paid Directors (3.16 and 3.17). The example for 3.17 highlights that if the Director is not usually paid until March 2021, but was furloughed for the full month of November 2020, then
“employers can only claim CJRS in advance if the payroll run is imminent. If W Ltd claims CJRS for November 2020 in respect of this director, they will need to pay them (and operate PAYE) earlier than usual.”
Name and Claim
It was noted that HMRC would publish a list of all employers that have claimed for CJRS, which can be viewed here. It only provides the employers name attached to the qualifying PAYE scheme and includes data for claimed periods in December 2020.
From February, future publications will provide the indication of the value of the claim within a banded range, which ranges from:
- £1 to £10,000
- £10,001 to £25,000
- £25,001 to £50,000
- £50,001 to 100,000
- £100,001 to £250,000
- £250,001 to £500,000
- £500,001 to £1,000,000
- £1,000,001 to £2,500,000
- £2,500,001 to £5,000,000
- £5,000,001 to £10,000,000
- £10,000,001 to £25,000,000
- £25,000,001 to £50,000,000
- £50,000,001 to £100,000,000
- £100,000,001 and above
With lockdown restrictions still in place, the CJRS Scheme is as important as ever, but with cases slowly decreasing and the vaccine being rolled out across United Kingdom, the question that will invariably be asked is “will furlough be further extended from April 2021?”
A report from the Institute for Employment Studies recommends that “Flexible Furlough” should be extended through to autumn 2021 along with maintaining the £20 uplift in Universal Credit beyond March 2021 and reforming and improving Statutory Sick Pay to at least £200 a week.
From the findings gathered the report believes action is needed in four main areas:
- Supporting low-income households to manage through the crisis – and in particular, those who have lost jobs or income
- Making work better for those in low-paid and less secure work
- Reform and investment in employments and skills services – both for those in low-paid work and disadvantaged groups that lost their jobs
- A longer-term settlement for the low paid – including a commitment to eradicate hours poverty
Any future changes in regards to the CJRS will be communicated as they become available.
For further information, or if you have any questions, please contact Brian Robb or your usual AAB contact.