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Furlough scheme reinstated for English lockdown

The coronavirus job support scheme (CJRS) will continue until 31 March 2021 with grants covering 80% of wages, while the job retention bonus scheme has been scrapped. This article has been updated with new information published on 5 November.

3rd Nov 2020
Tax Writer Taxwriter Ltd
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Boris Johnson
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Prime Minister Boris Johnson holds a Covid-19 press conference to announce a new national lockdown and an extension to the furlough scheme.

Halloween was truly a nightmare for many accountants as the government’s announcement of England's new month-long lockdown came just as the nation was settling down to enjoy the second live show of Strictly Come Dancing.

Friday night had seen the release of further JSS details, but by Saturday evening that scheme was put on the back burner, with a full extension of the existing furlough scheme (CJRS). On Wednesday 5 November there was another anouncement by Rishi Sunak extending the CJRS again.

It appears that the JSS has now been scarificed along with the job rentention bonus.

The new English restrictions will apply from 5 November to 2 December 2020, but the financial support for employers applies from 1 November to 31 March 2021 for eligible employers across the UK. 

What support is given?

The furlough scheme has been reinstated with the similar conditions as applied in August 2020.

The CJRS grant will pay for 80% of the employee’s current wages for time not worked, up to £2,500 per month. The employer must pay for all of the employer’s NIC and employer’s minimum workplace pension contributions on those wages.

The employer can top-up the employee’s furlough pay at their own expense, if they wish to.

Business grants paid by local authorities for closed businesses premises will apply in England, the devolved administrations will set their own level of business support (see below).

Which employees qualify?

Employees who were on the employer’s payroll at 23 September 2020 will qualify to be included in CJRS claim for November; they don’t have to have been included in an earlier CJRS claim. The employee must have been paid by the employer, and that pay must have been reported on a RTI return before midnight on 30 October. Employees who were made redundant or who left the employment after 23 September 2020 can be reinstated and included in a CJRS claim for November.   

Employees on any type of contract can qualify, including zero hours, contractors and sole-directors, but there will be issues over determining the reference pay to use and the usual hours worked.  

Flexi furlough

Flexible furlough will be permitted alongside full-time furlough, so staff may be brought back part-time to say, set up the premises for the lifting of national restrictions, or to prepare for Brexit.

The same rules for flexible furlough will continue to apply as they have done since 1 July, so the employee may be furloughed for a few days or hours per week. There appears to be no minimum time set for furloughed hours or working hours.  

However, each furlough claim must be for a period of at least seven consecutive calendar days.

Which employers qualify?

All employers with a UK bank account can claim support under the extended CJRS, there is no financial test to pass for larger employers as applies for the (now postponed) JSS.

Charities and not-for-profit organisations can also claim in respect of their employees. However, public sector bodies and publicly funded organisations are not expected to use the scheme. 

How to claim?

The claim process will be very similar to that which has applied so far under CJRS, the employer will have to report the hours the employee has not worked in a claim period, and the usual hours.

Claims can be made up to 14 days from the end of the pay period, and the CJRS grant should be paid within six days of the claim being submitted. Some details are included in this factsheet but legislation is expected to be published shortly.

Self-employed

There is also increased support for the self-employed; the next SEISS grant will be given at 80% of average profits, and applications for those grants will open on 30 November.    

Local grants

Where businesses have been required by law to close, they will be able to apply for a support grant from their English local authority, based on the rateable value of their business premises:

Rateable value of premises  Grant payable per two weeks
Up to £15,000 £667
£15,001 to £50,999 £1,000
£51,000 or more £1,500

Different local business grants will be available in Wales, Scotland and Northern Ireland.

Mortgage holidays

Applications for mortgage holidays for up to six months were due to close on 31 October, but this facility will now remain open for borrowers who have been impacted by coronavirus. The FCA will announced details of who can qualify in the next few days.

Rebecca Benneyworth will be discussing the furlough extension, SEISS and other changes this Wednesday on AccountingWEB Live. You can save your place by registering to watch Tax Talk - spaces are limited! 

Replies (36)

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By TheBudge
01st Nov 2020 09:56

Is there any news on whether staff made redundant in October can be brought back onto the payroll?

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Replying to TheBudge:
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By wilcoskip
01st Nov 2020 23:31

Yep, as far as questions go, that's a biggie.

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Replying to TheBudge:
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By Paul Crowley
02nd Nov 2020 09:52

My understanding is yes
But if the job does not exist in a month's time what is the point?
No job to protect

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By Matrix
01st Nov 2020 11:35

What is “current wages”?

Why do you need clarification on whether contractors and Directors can apply, if they are working part time then I expect this is great news since they qualify whereas they didn’t before as unable to stop working for 3 weeks?

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By valakot
01st Nov 2020 19:28

So they reinstated scheme, can employers reinstate stuff made redundant in October (which wouldn't be redundant have they informed businesses about this plans a tid bit earlier than few hours before scheme due to end).

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Replying to valakot:
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By Paul Crowley
02nd Nov 2020 09:56

On companies to be struck off?

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Morph
By kevinringer
02nd Nov 2020 09:31

Saturday Boris announced the extension of furlough. Sunday morning HMRC updated all the CJRS publications to say the scheme had closed (see https://www.accountingweb.co.uk/community/blogs/kevinringer/government-l...). This morning HMRC re-updates all the publications to say the scheme as been extended 'until December 2020'. What does 'until December' actually mean? Does that actually mean the start, or end, of December? Why so vague?

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Morph
By kevinringer
02nd Nov 2020 09:35

Boris has followed Wales' lead. The English lockdown rules are very similar to what are already subject to here in Wales. The Welsh Government asked for an extension to JSS and even offered to pay for it. But the UK government is so ignorant that the Chancellor didn't even bother replying to the Welsh Government's written request. But when it suits Boris to extend CJRS it is done at the drop of a hat. Doesn't seem fair and even though England and Wales are subject to the same rules, English businesses will be able to use CJRS and JSS but Welsh businesses could only use CJRS to start with.

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Morph
By kevinringer
02nd Nov 2020 09:39

Rebecca says 'Employees who were on the employer’s payroll at 30 October 2020 will qualify to be included in CJRS claim for November; they don’t have to have been included in an earlier CJRS claim.' but https://www.gov.uk/guidance/check-which-employees-you-can-put-on-furloug... which has been updated this morning says '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'. No mention of October. Rebecca, please can you show us on GOV.UK where it says about the 30 October date.

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Replying to kevinringer:
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By Paul Crowley
02nd Nov 2020 10:02

Employers
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.
The government expects that publicly funded organisations will not use the scheme, as has already been the case for CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted. All other eligibility requirements apply to these employers.

https://www.gov.uk/government/news/furlough-scheme-extended-and-further-...

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Replying to Paul Crowley:
Morph
By kevinringer
02nd Nov 2020 10:13

Thanks Paul. Why can't HMRC publish correct documents?

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By MilanC
02nd Nov 2020 09:45

Why has the qualifying date been set at 30th October? Many employers submit their RTI returns at month end. So in this case if the RTI was submitted on 31st October, is the employer still elligible to claim on the extended furlough scheme?

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Replying to MilanC:
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By Paul Crowley
02nd Nov 2020 09:58

30 Oct to avoid phantom new employees

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Replying to Paul Crowley:
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By MilanC
02nd Nov 2020 10:12

Thanks Paul.
So employers who had staff on full/flexible furlough in October will not be elligible for the extended furlough if staff continue to be furloughed becasue the RTI was submitted on 31st October which is their normal RTI filing date rather than 30th October?

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Replying to MilanC:
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By theShayan
02nd Nov 2020 10:30

I think the meaning of oct 30 means all the rti before that day. So if a business sends the rti on last day all the employees on July 31 RTI should be eligible for furlough... Correct me if my understanding is wrong..

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Replying to MilanC:
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By theShayan
02nd Nov 2020 10:30

I think the meaning of oct 30 means all the rti before that day. So if a business sends the rti on last day all the employees on July 31 RTI should be eligible for furlough... Correct me if my understanding is wrong..

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Replying to theShayan:
Morph
By kevinringer
02nd Nov 2020 11:03

https://www.gov.uk/government/news/furlough-scheme-extended-and-further-... says:

'To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.'

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Replying to kevinringer:
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By Handa
02nd Nov 2020 13:27

This statement which Kevinringer has posted is an extract from page 3 of the Treasury's press release published on 31/10/20. In first part, it states that employee must be on ER PAYE payroll by 23:59 3o/10/20. It is the second part that is causing confusion in my mind whereby it states that RTI submission to HMRC must have been made on or before 30/10/20. This is because normally deadline to submit RTI is last day of the month. In our case we submitted RTI returns for month October on 31/10/20 around 6pm for employees who have been on Full Furlough since March & Flexi-furlough from 1/7. Does it mean that employers cannot claim CJRS grant for these existing employees now for whom ER have claimed grants under both Furlough & Flexi-Furlough schemes?
HMRC Guide updated 1/11/20 does not refer to RTI must have been submitted on or before 30/10/20. On page 2 of this guide it states
"..... 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. This may differ if you have an employee returning from statutory parental leave." see link below

https://www.gov.uk/guidance/check-which-employees-you-can-put-on-furloug...

Could I please request Rebecca to offer us clarification on this asap.

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Replying to theShayan:
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By MilanC
02nd Nov 2020 14:18

Thank you Shayan.That makes sense.

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Replying to MilanC:
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By Paul Crowley
02nd Nov 2020 12:57

Only issue is new schemes and new employees.
Any prior RTI is good
Aug sept etc
It misses new employees not on the Sept RTI but on Oct if Oct not filed by Friday 30th
Less lost people if file weekly

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Replying to Paul Crowley:
Morph
By kevinringer
02nd Nov 2020 16:38

https://www.gov.uk/government/news/furlough-scheme-extended-and-further-... says:

'Neither the employer nor the employee needs to have previously used the CJRS.'

That contradicts https://www.gov.uk/guidance/check-which-employees-you-can-put-on-furloug...

'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.'

That second link was updated on 1 November to say the CJRS scheme had ended on 31 October. So whoever is maintaining the content is out of touch with developments. I suspect the retention of the 30 June criteria is another example of the link being out of touch.

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By theShayan
02nd Nov 2020 10:23

Hi, can you please express your views on the extended furlough scheme in connection to the Job retention bonus. Say if due to furlough the minimum threshold of taxable salary £1,560 could not be met. would the employer would still be able to claim for the bonus.

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Replying to theShayan:
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By Paul Crowley
02nd Nov 2020 13:00

My guess is that it is all due a rewrite
Qualification months delayed at least one month would be a reasonable expectation

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Replying to Paul Crowley:
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By theShayan
02nd Nov 2020 15:04

Thanks... Lets see how things develop in near future...

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By RogerMT
02nd Nov 2020 12:06

I think one of Accounting Web's v helpful webinars on the new scheme would be a good idea, once we have clearer rules on the new CJRS. The part about waiting for clarification on the eligibility of directors is rather worrying!

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Replying to RogerMT:
Richard Hattersley
By Richard Hattersley
02nd Nov 2020 15:24

Hi Roger,

Rebecca Benneyworth will be joined by Anita Monteith this Wednesday to discuss the return of the CJRS and other developments. Let's hope we have some more guidance by then.

You can sign up here: https://www.accountingweb.co.uk/tax-talk-with-rebecca-benneyworth-get-th...

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Replying to Richard Hattersley:
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By Paul Crowley
02nd Nov 2020 20:06

Already on the list
Change of subject from JSS to CJRS V3?

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By Crouchy
02nd Nov 2020 13:12

will the furlough bonus be open to staff furloughed now for the first time? 9assuming they are kept on and meet eligibility criteria?)

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By fawltybasil2575
02nd Nov 2020 14:00

Firstly, as has been correctly stated by helpful members above, there is a CONFLICT in the current GOV.UK guidance: the guidance states that an employee must be on the payroll BY [ie ON OR BEFORE] "23.59 30th October 2020": the requirement that the employee must have been employed BY 30 June 2020 is pointless (since the employee was required to be on the payroll 4 months previously).

Kevin kindly (11.03 post) quotes from the the GOV.UK guidance:-

'To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30th October 2020'.

Frankly, I am sure that, in the next few days, the GOV.UK guidance will be amended to remove the inconsistency (it is unsatisfactory that this inconsistency arises but in reality it is due to the "last-minute" changes, on the lockdown generally, on Saturday).

Whilst no more than a (hopefully) "not too uneducated guess", a possibility is that the words "on an employer's PAYE payroll by 23.59 30th October 2020" should have read " . . . AS AT 23.59 30th October 2020".

If my theory is correct, the "30 June 2020" requirement still holds good, but is subject to the FURTHER requirement that the employee is STILL on the payroll at 23.59 30th October 2020.

Time will tell.

Basil.

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Replying to fawltybasil2575:
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By Matrix
02nd Nov 2020 18:43

No in their email it says that neither the employer nor the employee need to have previously used the CJRS.

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Replying to Matrix:
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By fawltybasil2575
02nd Nov 2020 20:22

@ Matrix.

Thank you. As I have mentioned above, the current GOV.UK guidance refers to the employee's having had to be furloughed on or before 30 June 2020. Thus is one of the links:-

https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronav....

I do not dismiss the possibility that the above current guidance, and a few others still current, will be corrected very soon, to remove the references to "30 June 2020" (especially since they are wholly UPDATES of previous guidance, the person(s) responsible for the updates omitting to delete the references to 30 June 2020).

Basil.

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Replying to fawltybasil2575:
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By Matrix
03rd Nov 2020 08:13

Given they have emailed all their customers to say there is no prerequisite then I have assumed the guidance/legislation will be updated too and have advised clients, who I assume also have received this email, accordingly.

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By fawltybasil2575
04th Nov 2020 11:52

The conflicting information supplied by HMRC (as per my above posts) is at last explained by the GOV.UK guidance released yesterday, here (and in two other guidance notes):-

https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronav...

Crucial are the following words:-

“The Coronavirus Job Retention Scheme is being extended until December 2020.
The guidance on this page reflects the rules UP TO AND INCLUDING 31 OCTOBER 2020 (my emphasis).
We will update this page shortly to:
• tell you when you can claim the extension
• include the rules relating to the extension”

GOV.UK have (somewhat belatedly) realised that they had not updated their guidance (I referred in my post at 20.22 on 2 November 2020 of that possibility).

The emails from HMRC, as referred to by the ever-helpful Matrix above, are indeed correct, in stating that there is no requirement for employees to have been furloughed by 30 June 2020.

Basil.

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Anthony Constantinou
By anthonyconstantinou
04th Nov 2020 12:46

This seems to be confusing what will be the idea behind flexible furlough or full-time furlough?

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By KKelly
05th Nov 2020 10:40

Does the CJRS extension apply only in England or across the UK as a whole?

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Replying to KKelly:
Morph
By kevinringer
05th Nov 2020 11:48

CJRS (and JSS) is UK-wide so applies across the UK including Wales that comes out of lockdown on Monday.

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