Coronavirus job retention scheme has been extended to the end of March 2021 to help businesses through the winter.
For claims between 1 November 2020 and 31 January 2021 employers will be able to claim a grant for 80% of usual wages up to a maximum government grant of £2,500 per month per employee for the time the employee spends on furlough. The £2,500 cap is proportional to the hours not worked.
Employees must have been employed and on the PAYE payroll on 30 October 2020 and the employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for employees.
Where an employee was not previously eligible for CJRS, the calculation will take account of updated reference periods. Full details of the calculation are available at https://www.gov.uk/guidance/calculate-how-much-you-can-claim-using-the-coronavirus-job-retention-scheme?
Employers will need to:
- pay their employees for the time worked and the government grant for the time not worked;
- operate PAYE on behalf of their employees, as per CJRS
- pay employer National Insurance contributions and pension contributions for their employees on the full amount that they pay the employee, including any scheme grant
Employers will not be:
- required to contribute towards 80% of the employees’ usual wages for the hours not worked
- able to claim for employer National Insurance contributions or pension contributions
Employers can top up employee wages above the maximum salary threshold at their own expense.
This scheme will be reviewed by the government in January 2021 to decide if employers will be required to contribute more.
