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Job Retention Scheme extended to March

Chancellor Rishi Sunak extended his Winter Economic Plan for the fourth time in six weeks to extend the Coronavirus Job Retention Scheme from early December to the end of March.

5th Nov 2020
Editor in Chief (interim) AccountingWEB
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Chancellor Sunak tweaks his Winter Economic Plan for the fourth time in six weeks.
Rishi Sunak_BBC Parliament TV

Sunak confirmed press reports that the furlough scheme would be extended in a lunchtime statement to the House of Commons on 5 November.

In a typically choreographed leak to the Financial Times on Thursday morning “the chancellor’s allies” told the paper Sunak would set out a “a fair and generous” package to address criticism that the current assistance formula favours southern England.

With CBI and TUC joining forces to lobby for the coronavirus job retention scheme to be extended until the spring, the BBC and Guardian were reporting that the Chancellor was poised to respond to their pleas.

Along with the extended furlough period, the updated support measures presented by the Chancellor included:

  • An increase in the November to January self-employed income support grant from 55% of average profits to 80% - up to a maximum of £7,500
  • A £2bn increase in upfront funding guarantees to £16bn for the devolved administrations and confirmation that the CJRS would be available to all the UK’s member countries until the end of March.
  • Cash grants of up to £3,000 per month for businesses forced to closed. The grants will be administered as before by local authorities, who will also be given £1.1bn to distributed in the form of one-off, £20 per head payments to businesses
  • Plans to extend existing government-backed loan schemes and the Future Fund to the end of January, and an ability to top-up Bounce Back Loans.

Furlough factsheet

Details of the conditions surrounding the extended furlough scheme were published in a companion Treasury factsheet, which explained that as with the original CJRS, employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month.

Furlough grants will continue to be paid on the basis of claims submitted through the HMRC portal after calculating employees’ payroll. The system will open for claims from 8am Wednesday 11 November and claims for this month must be made by 14 December 2020. Subsequent claims should be submitted by the 14th of the following month.

The revised scheme allows employers the flexibility to use staff for any amount of time and shift pattern, including furloughing them full-time. The employer will not have to pay wages for hours not worked, but will be asked to cover employer national insurance and pension contributions for the whole furlough period.

The Treasury explained that neither the employer nor the employee needs to have previously claimed or have been claimed for under CJRS to lodge a claim under the extended CJRS, but then stipulated that the employer needed to have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020 for that employee.

Employees who were made redundant or stopped working after the Job Support Scheme was announced on 23 September can be re-employed and put forward for furlough grants.

“We will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more,” the Treasury said.

With furlough extended to March, the Chancellor said the Job Retention Bonus planned for February falls away. “Instead we will redeploy a retention incentive at the appropriate time,” he told the Commons.

The Chancellor devoted much of his statement explaining how his measures had held down unemployment and business failures and defending the latest changes.

“I have had to make rapid adjust to our economy plan as virus has accelerated,” he said.

That message cut little ice with watching accountants. PandoraSleeps commented in Any Answers: “I wish they would issue the updated guidance for CJRS November. I am sure there will be some surprises and nasties in there waiting to catch us out. I almost feel numb to these announcements now. The rate of change and the complexity of the schemes is becoming exhausting.”

On Twitter at around the same time @TaxQueen Sue Christensen caught the mood of exasperated fatigue with this comment:

Replies (22)

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By Crouchy
05th Nov 2020 13:35

ta very much

why are these numpties incapable of getting a plan in place and announcing it in one go

newsletter to clients last week about support changes and JSS

saturday new lockdown and support announced - newsletter to clients monday morning
monday afternoon support for self employed changed - another update for clients
thursday - more changes to both furlough and SEISS - now another newsletter needed for clients

I dont know who is more fed up of all the changes us or clients, one thing for sure is i've wasted a lot of time in the last week or so!

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By ireallyshouldknowthisbut
05th Nov 2020 16:28

The complete lack of any sort of basic planning here is staggering.

We have had 8-9 months of knowing about Covid and that fact the UK is going to have to make big measures.
We have had the whole summer knowing we would most likely get a second wave & lock down of some description in the autumn/winter.
We have had the past 6-8 weeks pretty much confirming that a national lockdown was imminent.

Yet we don't have anything other than knee jerk reactions coming out of no.11.

Any sensible planner would have had 3 or 4 scenarios plotted out over the summer, got those checked, all the wrinkles ironed out through consultations over the summer, and then when it comes to it, simply pulled the relevant one off the shelf.

Instead we seem to be making it up on the hoof, and as a result jumping all over the place and now the ridiculous situation of having made now THREE furlough schemes which have been canned before being put in place. You cant claim that "events have moved quicker than expected" as you should be building in all those scenarios in your planning in the first place.

And who has to pick up all the mess flung in our direction? Us lot.

The profession must have wasted hundreds of thousands of hours on this through the constant tinkering.

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Replying to ireallyshouldknowthisbut:
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By matchmade
06th Nov 2020 10:07

It's the same with most NHS trusts, who unbelievably have failed to set up Covid-19 testing and track-and-trace facilities for their own staff over the summer when they had the time and unlimited budgets, and are now complaining that the national testing and tracing systems are inadequate. The NHS has facilities for innumerable other kinds of tests, so why can't they organise weekly testing regimes for their employees - and all care home staff too for that matter?

The same with local authorities: perhaps if they'd bothered to set up their own testing facilities they'd have settled the nerves of skittish, boshie teachers who are still signing themselves off sick at the slightest sign of "symptoms". And universities too, professing themselves amazed that their new intake of students have arrived and promptly caught Covid.

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Replying to matchmade:
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By johnjenkins
06th Nov 2020 12:14

I would think that, as the NHS concentrated on covid during lockdown, bringing everything else (operations that had been cancelled etc.) became a priority. Germany probably had the best trace and track and yet they are in lockdown now. This virus doesn't care about politics or Governments or trace and track, it kills mostly the elderly with underlying problems. All lockdown does is prolong that eventuality. The only way to stop it is for the whole world to go on lockdown at the same time until it's eradicated.

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By SXGuy
05th Nov 2020 17:16

While I welcome the increase to the SEISS and extension of furlough, I'm getting really tired of advising clients and writing my blogs with information that becomes redundant a week or so afterwards. I'm at the point now where I'm having to say, this is how it is today, I can't promise how it will be tomorrow.

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Replying to SXGuy:
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By Open all hours
05th Nov 2020 17:26

Or even how things are right now. They used Martin Lewis t’other day knowing that he would tweet ‘SEISS 3 remains at 40%’ before the PM reveals 80% in The Commons before the end of the afternoon. Presume the idea was to make BoJo sound generous whereas it in reality it just confirms shallow opportunism.

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By AndrewV12
06th Nov 2020 09:58

The chancellor has a lot of hair, lucky for him as he must be tearing it out on a weekly basis.

The former chancellery Sajid Javid had no hair, lucky he left office when he did, unsure what that leaves to tear out.

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By Paul Cowen
06th Nov 2020 10:00

The self employed grant is for 3 months and I am guessing again it will be an all or nothing claim. What about those that cannot work November due to lockdown but are fully operational in December and January. Seems a waste of taxpayers money that they can claim the full 3 months, but what else are they expected to do. They have lost a full month's earnings so only right to claim. In my view there should be an option to claim 1,2 or 3 months.

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By johnjenkins
06th Nov 2020 10:07

What we seem to forget is that the scenario is changing all the time so a "fixed plan" cannot realistically be made.
There is a general plan and that seems to be to protect the NHS from being overrun.
With something like this you have to be flexible enough to change direction in an instant. Our stable world has come to an end and we will have to adapt to what is going on, RTI as HMRC would say.
I think that we can be pretty sure that there will be another lockdown of sorts prior to March 2021. So we can put measures into place until March.
My view is come March 2021, once our NHS is up to speed, we will go back to a bit more normality.

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Replying to johnjenkins:
Caroline
By accountantccole
06th Nov 2020 11:52

French have just turned on "chomage partiel" system with some tweaks. There was absolutely no reason why there couldn't have been disaster scenario planning with this ready to go. Play with the % and eligibility criteria fine, but this has truly been a mess

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Replying to accountantccole:
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By johnjenkins
06th Nov 2020 12:18

Nothing is going to stop this virus apart from world wide lockdown at the same time with no travel between countries. Any measure will only delay the inevitable.

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Replying to johnjenkins:
Caroline
By accountantccole
06th Nov 2020 11:52

French have just turned on "chomage partiel" system with some tweaks. There was absolutely no reason why there couldn't have been disaster scenario planning with this ready to go. Play with the % and eligibility criteria fine, but this has truly been a mess

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Replying to accountantccole:
By ireallyshouldknowthisbut
06th Nov 2020 14:34

@accountant cole that is exactly my earlier point.

Its government job to have disaster plans for all sorts of unlikely scenarios, let along really likely ones.

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By duncanp
06th Nov 2020 10:08

How should we handle employees who were made redundant at the end of October - they have received redundancy pay and payment in lieu of notice and they signed to agree to that, so how would we handle taking them back - ask them to pay it back, or agree with them to take them back on the understanding that at the end of the furlough period end they will be made redundant again, and we pay them any difference due to longer service? Very unclear - is the fact that they signed for their payments the end of the matter?

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By raju m
06th Nov 2020 10:11

The Chancellor has got one of the worst job in the country at present.
What ever he does it will not be good enough for 99% of the population.
I would not do his job even if i was paid a million pounds,

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By dawnjolley
06th Nov 2020 12:41

This article states that employees that have not been furloughed before can now be furlough for this new extended scheme. However the HMRC website, which claims to have been fully updated on 5th November for the extended scheme, is still stating that:

"You can only claim if you have previously furloughed your employee before 30 June 2020 and you submitted a claim for this by 31 July 2020" and "The number of employees you can claim for in any claim period starting from 1 July 2020 cannot exceed the maximum number of employees you claimed for under any claim ending by 30 June 2020."

Can anyone shed any light on which is correct?

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By Ian McTernan CTA
06th Nov 2020 12:59

Seems a lot of people aren't used to what is called a 'dynamic environment' where things change rapidly. Welcome to the world of business.

Crouchy complaining about having to send out a newsletter to clients..seriously, it's a matter of an hour or less then click send on the email. Plus might have been a better idea to wait a few days for the dust to settle instead of bombarding them with numerous updates- after all, the claims for November can't be made yet.

IReally moaning about the changing scenario. The idea was to avoid a national lockdown with the tier system- but as usual, covidiots don't listen and we ended up having to do a partial national lockdown instead. It's an evolving situation and they are throwing around different plans all the time, but circumstances change and the science changes with it. Those plans you would have drawn up 5 months ago would be obsolete in the new circumstances.

It's impossible to plan for every eventuality, plus you have to remember there are only so many slouths (civil servants) to go around and they can only work on so much at a time (plus committees, etc slow everything down), so planning out 3-4 scenarios for each eventuality isn't possible in practice. Great theory, but in the real world not possible given the numbers off work and the reduced capacity.

SXGuy is getting tired of writing his blogs...then don't bother. I would have thought having huge amounts of material to write about would be a good thing, just remember to date them and say 'up to date professional advice should always be sought as rules are amended frequently' and you're covered.

The constant moaning isn't helping. This is an opportunity to show your clients you care and to help them through very difficult times and be a beacon of light. The chancellor is moving as fast as the machinery of the civil service allows.

Excellent decision to extend the scheme given changing circumstances and my clients will be relieved with the extra help they will receive and I will be happy helping them- no matter how often the rules change (it's not like tax rules don't change all the time anyway...).

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Replying to Ian McTernan CTA:
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By Crouchy
06th Nov 2020 13:27

there's always one and it seems to be you!

the point being made by myself and most others is that the changes shouldnt have come that quickly, the position that was going to be in place yetserday for the change to 80% till March would have been known the week before, bearing in mind we're alwys a week or two behind the data

the SEISS changing from 40% to 55% to 80% in the space of five days shows either gross incompetetance or a petty attempt to score some political points

it is time consuming to send out endless updates, its not just the time of writing a newsletter and sending it, its dealing with the inevitable barrage of calls and emails from clients afterwards

our policy has always been to get information out to clients as soon as possible

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Replying to Crouchy:
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By johnjenkins
06th Nov 2020 14:03

We all like our clients to be well informed, but at present it is a matter of RTI and listening to the PM's briefing. I think stopping our NHS from being overrun is far more important than newsletters that are out of date when sent. You're an Accountant, I presume, so take note of the situation and act accordingly.

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Replying to Ian McTernan CTA:
By ireallyshouldknowthisbut
06th Nov 2020 15:16

@Ian, I normally agree with your posts but its not about being 'dynamic' its about declaring something one day, and a few days latter changing their minds.

it really ought not be that hard to have predicted a second national lockdown, and what that might look like in terms of support rules. Constantly tweaking pulling things up and down, in and out makes the whole thing highly complex to deal with and leads to constant reappraisals of who is in/out or sideways, which in turn burns a lot of time completely unnecessarily.

I don't disagreed with the second lockdown, nor the idea of further support (albeit it seems to be badly targeted) what got my goat is the sheer lack of any sort of rational planning for an obvious to arise situation.

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By North East Accountant
06th Nov 2020 14:09

Everyone in Government in whatever department is running the agile way now for everything and it's total insanity...... but the lunatics are running the asylum.

For example, GDPR. ICO guide versions were as follows;

08/02/18 - Version 19
22/03/18 - Version 49
18/05/18 - Version 82
25/05/18 - GDPR date
29/05/18 - Version 122
25/09/18 - Version 229

210 changes between 08/02/18 and 25/09/18.

For HMRC support schemes I've got 531 PDF's already of all the guidance changes date and time stamped... not including any that have been issued this week.

My top tip to preserve your sanity is to tell your clients at the outset that you will communicate with them, but will do so at the time that they have to take any action or are able to take any action.

For example, SEISS 3, no applications can be made until 30/11/20, so send an email first thing Monday 30/11/20 having read the up to date guidance then. You can be certain it will change umpteen times from now until then.

Otherwise we look stupid. Monday I was discussing the Job Retention Scheme Bonus with a large employer client........ now it's gone.

And just think what MTD will be like for April 2023...... thousands of changes to rules and guidance to come, and HMRC will sign off final version on 04/04/23..... and then change it 100's of times thereafter.

Full brexit 01/01/21.... and 06/11/20 still no-one has a glue what the rules are.

I can forgive a bit for unforeseen things like Covid but for others like, GDPR, Brexit and MTD like I said it's insane.

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By SXGuy
06th Nov 2020 17:10

Can we all refrain from accusing people of not following lockdown measures or commenting on how the NHS could get overrun or how we can't get rid of the virus without a vaccine etc etc. Not only does it have sweet f a to do with the subject at hand but I'm personally sick of reading know it all's who just spout the party line like its written in stone and as gospel.

There are a few of us, who have actually studied the data and compared it to what the government are spewing out but luckly for some, we don't sit here preaching about it we simply get on with the matter at hand.

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