Coronavirus Job Retention Scheme extended until end of March 2021
06 November 2020
Speaking in Parliament on 5 November 2020, Chancellor of the Exchequer, Rishi Sunak, confirmed that the Coronavirus Job Retention Scheme (CJRS) will be extended until the end of March 2021, due to the ongoing economic turbulence created by the outbreak of coronavirus.
The CJRS was originally extended until 2 December 2020, but evidence from the first lockdown has highlighted the fact that the economic effects last much longer for businesses than the length of time for which the restrictions are imposed, hence the scheme being further extended until the end of March 2021.
Employers will only be asked to contribute the employer National Insurance (NI) and pension contributions for any hours not worked, and the government will reimburse them for 80% of an employee’s salary, up to a cap of £2,500 per month. The scheme will be reviewed in January 2021 to establish whether economic conditions have improved enough for employers to increase the level of their contributions.
Businesses will be able to make claims either shortly before, during, or after running payroll, and claims can be made from 8am on Wednesday 11 November 2020. Businesses are advised that claims relating to November must be sent to HMRC by 14 December 2020 at the very latest. Claims relating to each subsequent month must be submitted by the 14th of the following month.
Neither employer or employee has to have previously claimed, or have been claimed for, under the original CJRS in order to make a claim under the extension to the CJRS, where other eligibility criteria are met.
Employers can claim for:
- Employees who were employed, and on PAYE payroll, on 30 October 2020
- Employees who the employer has made a PAYE Real Time Information (RTI) submission to HMRC for, between 20 March and 30 October 2020
- Employees who are re-employed. Any employees who were employed, and on payroll as at 23 September 2020, who were made redundant or stopped working can be re-employed and claimed for under the CJRS. An RTI submission including these employees must have been sent to HMRC between 20 March 2020 and 23 September 2020
HMRC will publish details of the employers who make claims from December onwards under the extended scheme, and full details of this will be included in guidance which is due to be published next week.
Due to the fact that the CJRS has been extended, the Job Retention Bonus (JRB) will now not be paid out in February, but a retention incentive will be redeployed at an appropriate time.
Rishi Sunak said:
“I’ve always said I would do whatever it takes to protect jobs and livelihoods across the UK - and that has meant adapting our support as the path of the virus has changed.
It’s clear the economic effects are much longer lasting for businesses than the duration of any restrictions, which is why we have decided to go further with our support.
Extending furlough and increasing our support for the self-employed will protect millions of jobs and give people and businesses the certainty they need over what will be a difficult winter.”
The level of support provided for the self-employed has also been increased, meaning that the third grant under the Self-Employment Income Support Scheme (SEISS) will equate to 80% of average trading profits, up to a cap of £7,500 for those who are eligible.
In addition to this, it has been confirmed that:
- Businesses that are closed will be provided with cash grants of up to £3,000 per month
- Local Authorities will be provided with £1.1 billion, distributed on the basis of £20 per head, for one-off payments to help them to support businesses more broadly
- Existing government-backed loan schemes are expected to be extended, including the Future Fund, to the end of January 2021. There will be an option to top-up Bounce Back Loans
- Mortgage payment holidays for homeowners will be extended
- Councils will be provided with up to £500 million in order to support the local public health response
A factsheet has also been made available.
The information in this article is accurate at the time of publication. For all the latest information, news and resources on how the COVID-19 pandemic is affecting payroll professions, visit our Coronavirus hub.