The chancellor, Rishi Sunak, has taken the decision to extend the Coronavirus Job Retention Scheme (CJRS) until 31 March 2021 in an attempt to give businesses security through the winter.

The CJRS, also known as the furlough scheme, will now pay up to 80 per cent of the cost of hours not worked by an employee, up to a cap of £2,500 per month until January 2021, when the scheme will be reviewed.

Employers will need to pay National Insurance and pensions contributions for the hours not worked.

Who can claim?

The furlough scheme aims to subsidise the wages of those who cannot work, either because their place of employment is closed or because there is not enough work for them to do. Help is available for both employers and the self-employed.

Employers and employees

Employers can make a claim in respect of an employee, even if they have not previously used the CJRS, provided that the employee was on the payroll as at 3 October 2020.

Employees who have been made redundant but who were on the payroll as at 23 September 2020 can be re-employed and a claim made in respect of their wages. A claim can be made for a part-time worker or someone working shifts, with the flexibility to allow hours to be varied as required.

Working patterns can vary, but each short-time working arrangement must cover a minimum period of seven days. Employees who are shielding or who have family members who are shielding in line with public health guidance can be furloughed.

The self-employed

Self-employed workers will be able to claim a grant of 80 per cent of their normal trading profits over a three-month period, up to a maximum of £7,500, and to be paid in a single instalment.

Making a claim

Claims by employers can be made from 8 am on 11 November 2020. Any claims for November must be made to HM Revenue & Customs no later than 14 December 2020. Claims for subsequent months must be made by the 14th day of the following month.

The government’s grant will not cover Class 1 employer NIC or pension contributions, although they remain payable by the employer.

Information on calculating how much to claim will be made available on the government website. Claims by the self-employed can be made from 30 November 2020.

The Job Support Scheme and Job Retention Bonus

Both the Job Support Scheme and the Job Retention Bonus have been put on hold for the time being, however an incentive for retaining employees is intended to be introduced at a later date.

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Andrew Robins

Nighat Sahi