In response to the new coronavirus lockdown announced by the Prime Minister on the 31st of October and the tougher restrictions which will be introduced from the 5th of November, the chancellor Rishi Sunak has decided to extend the Job Retention Scheme (furlough scheme) until December.
The scheme will remain open to small/medium and large, charitable and non-profit businesses. With this extension, the government’s support will return to the same level seen until August. However, employers will have the flexibility to bring back furlough employees making them work shorter hours rather than suspending their work completely. For hours not worked by the employees, the government will pay 80% of wages up to a cap of £2,500 per month and employers will pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employees does not work. Similarly, to the previous scheme, employers are still able to top up employees’ wages above the scheme grant at their own expenses (the remaining 20% is not covered by the government).
To be eligible for the extended furlough scheme neither the employer nor the employee needs to have previously used the support. However, employees must be on an employer’s PAYE payroll by 23:59 30th of 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.
It should also be noted that the Job Support Scheme, which was scheduled to come into effect on Sunday 1st November, has been postponed until the furlough scheme ends.
Further details, including how to claim this extended support will be provided by HMRC shortly.
For more information on the extended Coronavirus Job Retention Scheme, please contact us at info@well-tax.com or follow us on our social media.
