January 2021 Furlough Scheme update.
The Government has announced that the Coronavirus Job Retention Scheme, aka the Furlough Scheme, will be extended due to a third national lockdown. As a result, the Coronavirus Job Support Scheme will be postponed until April 30th, 2021, the end date of the current Furlough Scheme.
Click here for further details.
November 2020 – The Job Retention Bonus postponed.
The Job Retention Bonus will no longer be paid in February, as the Coronavirus Job Retention Scheme has been extended until the end of March 2021.
Albeit, due to the current change in circumstances and the second lockdown declared on the 31st October, the Furlough Scheme will now be extended for the duration of the lockdown period, while the Job Support Scheme will be postponed.
Here are the essentials employers need to know.
What is the salary funding level available for employers through this Furlough Scheme?
Furloughed employees will be eligible for 80% funding of their non-working hours, up to £2,500. This means that the salary costs for employers would significantly be reduced, compared with October’s Job Retention Scheme support level.
Employers would still need to make NIC and pension contributions along with salary payments for hours actually worked by the employee.
Which businesses are eligible for the Furlough Scheme?
The Furlough Scheme does not take into account the size of the business; hence it will be available for small-sized and bigger employers. The scheme would also be open for charities and non-profit organisations.
Which employers are eligible for the CJRS scheme?
An employer who is looking to furlough claim will need to have both:
- UK bank account.
- Have their employee or employees listed on a UK PAYE scheme.
It is important to note that an employee is required to be listed on the employers’ PAYE payroll by the 30th October 2020, in order to be furloughed.
Will contractors or company directors with no employees be eligible for the Furlough grant?
The scheme should cover all types of contractual arrangements.
This includes PSC directors, aka contractors who are, in effect, employees in their own company.
Read more on our Job Retention Scheme guide for limited company directors/contractors.
Will you still be eligible for a grant if you have not used the Furlough Scheme before?
Yes. Employers who did not make a furlough claim in previous months will still be eligible for the Job Retention Scheme grant in November.
Should employers furlough employees on a full-time basis?
In theory, you could, but this isn’t a requirement. Under the Job Retention Scheme, the amount of hours an employee is furloughed is at the employer’s discretion. Meaning, furloughing employees on a part-time or full-time basis are both acceptable.
When would employers be able to make a furlough claim for November 2020?
The Government is due to provide a further update in regards to the claiming process. However, if it follows on from the previous furlough scheme, claims should be able to be made 14 days prior to the salary payment.
What do employers need to report to HMRC when submitting a claim?
Employers will need to report both days and hours works throughout the furlough period they intend to claim for.
Bear in mind that you must claim for a minimum of seven consecutive calendar days. Meaning, you can’t furlough an employee for a shorter period than a week.