As you all should be aware, the Furlough Scheme has now been extended until the end of March 2021. The Government published a policy paper amending its Coronavirus Job Retention Scheme (CRJS) guidance, which can be found here.
The guidance applies to claims up to 31 January 2021 and broadly mirrors the previous guidance.
Key Points to Note
- Claims and amendments to claims must be made within tight timescales (see below), unless there is a “reasonable excuse for failing to make a claim in time”. Acceptable excuses for missing the deadline are very limited. The Government’s guidance on making a Claim for wages gives examples of what is meant by a ‘reasonable excuse’.
|Claim for furlough in||Claim submission deadline|
|November 2020||14 December 2020|
|December 2020||14 January 2021|
|January 2021||15 February 2021|
|February 2021||15 March 2021|
|March 2021||14 April 2021|
- An employee does not need to have been previously furloughed for the employer to use the scheme, neither does an employer need to have used the CJRS before.
- The limit on the number of employees that you can claim for has been removed. As from November, there is no maximum number of employees for which employers can claim.
- Flexible furlough is still an option.
- For claims up to 31 January 2021, employers can claim 80% of employees’ salaries, up to a maximum of £2,500 per month for the time the employee spends on furlough.
- To be eligible, employees must have been employed on 30 October 2020, as long as an employer has submitted a PAYE Real Time Information (RTI) submission between 20 March 2020 and 30 October 2020.
- Employers will need employees’ agreement to either extend furlough or put new employees on furlough. Furlough agreements must be in place before the start of the relevant claim period. Remember these will have to be kept for a period of five years as HMRC will expect to see appropriate records if they carry out an audit.
- Unlike previously, from December an employer cannot claim for any days in which a furloughed employee is serving contractual or statutory notice.
- The Government has stated that it will review its CJRS policy on January 2021 to see whether economic circumstances have improved enough to ask employers to contribute more under the CJRS. The Government’s 80% contribution may therefore change.
- From December 2020, HMRC will publish names of employers making claims under the CJRS, together with an indication of the amount claimed. Presumably this move is to try to reduce fraud.
Job Retention Bonus and Job Support Scheme
The Job Retention Bonus which was due to be paid to employees retained until the end of the January 2021, after the furlough scheme had ended, has been withdrawn and will not be paid in February 2021 as had been planned. This is due to the policy intention behind the Job Retention Bonus having fallen away. However, the Government has said that a retention incentive will be “deployed at the appropriate time”.
The Job Support Scheme, which was due to commence on 1 November 2020, to replace the CJRS, has been postponed until the end of the CJRS.
Government payments under the CJRS will be a grant, so will not need to be repaid, provided that the grant received covers an employee’s subsidised furlough pay, and which is paid to the employee. No part of the grant should be netted off to pay for benefits or a salary sacrifice scheme.
HMRC requires employers who have overclaimed CJRS or are unable or unwilling to use the grant to pay the employee’s salary, to repay the relevant amount claimed. This can be done by the employer either correcting its next CJRS claim or repaying to HMRC within 30 days (where another claim is not being made).
According to the HMRC guidance on Pay CJRS grants back], if the employer does not notify HMRC within the relevant time limits set out above, it may have to pay a penalty. HMRC will not be actively looking for innocent errors in its compliance.
HMRC will not levy penalties or other sanctions, which is described as an ‘amnesty period’, where the employer notifies HMRC of its mistake by the latest of:
- 90 days after the date of receiving the grant the employer was not entitled to;
- 90 days after the date of receiving the grant the employer was not longer entitled to keep because its circumstances changed; and
- 20 October 2020 (this date has not been updated to reflect the extension to the CJRS).
This article is accurate as at 4 December 2020, but is not a substitute for legal advice. Please check our website at Ellisons Covid-19 Business Support for up to date developments.