Newsflash : Job Retention Scheme extended to the end of November

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The Prime Minister, Boris Johnson has confirmed widespread expectations of a second national lockdown in England. This is to help stem the growing resurgence of the coronavirus. He also confirmed that the Job Retention Scheme has been extended. 

Coronavirus Job Retention Scheme

The Prime Minister has announced that the Coronavirus Job Retention Scheme (CJRS) commonly known as the Furlough scheme will be extended across the UK (including Scotland, Wales and Northern Ireland) until December. Employees will receive up to 80% of their salary for hours not worked. The exact date when the extended scheme will finish has not yet been confirmed.

The furlough scheme had been wound down over the last few months. Government support has reduced to 70% of wages in September and 60% in October before the scheme was due to come to an end on 31 October 2020. CJRS was going to be replaced by the Job Support Scheme (JSS).   This would have topped up wages for people returning to work on reduced hours. The introduction of the JSS has now been put on hold until the CJRS extension ends.

A Quick Summary

Here is a bullet-point summary of the CJRS extension:

  • People who are unable to work will receive up to 80% of their wages during the new lockdown. This payment is subject to a maximum of £2,500 per employee (for hours not worked). Employers will have the discretion to top-up the payments if they so wish.
  • The scheme will apply across the UK, in England, Wales, Scotland and Northern Ireland even where the regions are subject to different lockdown restrictions.
  • Employers will be required to pay employer NICs and pension contributions for their employees whilst on furlough.
  • Flexible furloughing, whereby employers can bring back employees to work part-time will be allowed. Employers will have to pay employees for the hours they work but can still use the scheme to cover any normal hours where employees are furloughed.
  • Businesses can be paid upfront by the Treasury to cover wages costs. However, there will be a short period whilst the Government changes the legal terms of the scheme and updates the system. During this time businesses will be paid in arrears.
  • To be eligible, employees must have been registered on their employers PAYE payroll by 23:59 on 30 October 2020. This means a Real Time Information (RTI) submission notifying payment in respect of that employee must have been made to HMRC on or before 30 October 2020.
  • All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.
  • Further details on how to make a claim are expected to be released shortly. There will be no gap in eligibility between the previously announced end date of the scheme on 31 October 2020 and this new extension.
Mortgage holidays

It has also been confirmed that mortgage payment holidays will no longer end as planned on 31 October 2020. Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday. Those those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.

Self Employed Income Support Scheme Extension (SEISS)

No further changes to support measures for the self-employed have been announced. The most recent announcement confirmed that the grants for the self-employed will be extended based on 40% of previous qualifying earnings.

The initial lump sum will cover three months of profits from 1 November 2020. This is calculated as 40% of average monthly profits, up to a maximum total of £3,750. The extended scheme will apply for 6 months from 1 November 2020. An initial taxable grant was made available to those who continue to trade and meet the eligibility requirements.

An additional second grant will be made available from 1 February 2021 to 30 April 2021. The level of this second grant amount is subject to review and will be set soon.

Source: HM Government Mon, 02 Nov 2020 00:00:00 +0100

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