The Chancellor has announced today that the furlough or Coronavirus Job Retention Scheme will be extended until the end of March 2021 with employees receiving 80% of their current salary for hours not worked. Employers will only be asked to cover National Insurance and employer pension contributions for hours not worked.
At the same time, Mr Sunak confirmed that the third Self Employment Income Support Scheme grant has also been increased to 80% of three months average monthly trading profits (up from 55%) capped at a maximum of £7,500.
The government’s economic support factsheet goes on to explain:
- Businesses have the flexibility to use the scheme for any amount of time and shift pattern, including furloughing them full-time
- No employer’s contribution is required to wages for hours not worked. They are asked to cover Employer National Insurance and Employer pension contributions only at this time, subject to review in January
- Businesses can claim either shortly before, during or after running payroll. Claims can be made from 8am Wednesday 11 November and be submitted by 14 December
- Neither employer or employee needs to have previously claimed or have been claimed for under CJRS. An employer can claim for employees who were employed and on their payroll on 30 October. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 30 March and 30 October 2020
- Employees that were employed and on payroll on 23 September 2020 who were made redundant or stopped working afterwards can be re-employed and claimed for. The employee must have been included on an PAYE RTI submission from 20 March to 23 September.
It is worth noting that, because of the extension to the CJRS, the Job Retention Bonus will not be paid in February. An alternative retention incentive will be considered instead.
Wayne Thomas, partner at Bates Weston comments:
“This increased economic support is very welcome news for many small businesses and the self-employed who were facing the prospect of extremely difficult trading conditions through the Winter. Hopefully this support will allow them to plan ahead with greater confidence, protect jobs and allow them to recover from a more solid basis in the Spring.”
Useful links:
https://www.gov.uk/government/publications/self-employment-income-support-scheme-grant-extension