Furlough scheme extended as the UK enters a second national lockdown

The Coronavirus Job Retention scheme (CJRS) was due to end at midnight on 31 October 2020, with the Job Support Scheme taking over from 1 November. However, following Boris Johnson’s announcement of a second national lockdown, the CJRS will be extended to cover the lockdown period.

Here are some the key implications for employers:

• The CJRS will continue to operate as the previous scheme did in August. This means that the Government will pay 80% of wages up to a cap of £2,500 for unworked hours and employers will only pay National Insurance Contributions (NICs) and pension contributions.
• Flexible furlough, alongside full-time furlough, will be permitted under the extended scheme. Employers will need to pay their employee’s normal salary for the hours worked, with the Government paying 80% of wages up to a pro-rata cap for hours not worked.
• As with the previous CJRS, employers can choose to top up employees’ wages above the 80% at their own expense if they wish.
• Employers must have a UK bank account and UK PAYE scheme to claim the grant.
• Neither the employer nor the employee needs to have previously used the CJRS. This contrasts to the previously wound down scheme in which only employees who have been furloughed prior to a June cut-off date could be furloughed further.
• For employees to be eligible for the extended CJRS, they must have been on the employers PAYE payroll before midnight on 30 October 2020. This means that Real Time Information (RTI) must have been submitted for the employee on or before 30 October 2020. This means that employees taken on over the summer and who were not eligible under the old CJRS can now be brought into scope.
• Employers will need to report and claim for a minimum period of seven consecutive days for each employee, and will need to report hours worked during the claim period versus the usual hours an employee would be expected to work in a claim period.

The Job Support Scheme (both open and closed) will be postponed until the CJRS finishes. The CJRS is currently due to continue until December 2020, but no end date has been confirmed. The UK’s lockdown restrictions look set to be in place until 2 December 2020 but Government ministers and advisers have indicated that lockdown (and presumably the CJRS) could be extended further.