The Devolution of the Coronavirus Job Retention Scheme (CJRS)

cjrs

CJRS – where are we now?

On 20th March 2020, Chancellor Rishi Sunak announced the Coronavirus Job Retention Scheme (CJRS), in a bid to fulfil his promise of doing “whatever it takes” to support businesses and individuals through the Coronavirus pandemic.

  • This funding was open to all employers with a PAYE payroll scheme that was created and started on or before 28th February 2020, including charities.
  • Employers could apply for grants of 80% of furloughed employees’ (employees on a leave of absence) monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage, provided they keep the worker employed.
  • The scheme covered the cost of wages backdated to 1st March 2020, if applicable.

There was a lot of noise surrounding this following announcements from other European countries and what had been proposed in the U.S.A. by President Donald Trump, that it didn’t go far enough, nor deep enough to cover directors of limited companies who were not on PAYE.

Following the perceived peak of the pandemic, with the R number returning to a level that had been targeted by Downing Street (below 1.0), the country was told to go back to work. So, at the end of June we were informed by government that if employers wanted to “flexibly furlough” employees from 1st July onwards then they should:

  • agree the hours and shift patterns that they wanted employees to work from 1st ‌July
  • pay employees’ wages for the time they are in work and apply for a job retention scheme grant to cover the remainder of their usual hours for which they are still furloughed
  • claim for further furlough periods as needed

For the repayment of previously furloughed staff, employers would have until 31st July to make any claims in respect of the period to 30th June.

Before we fast forward to the end of August, the Chancellor offered an additional incentive to employers for maintaining existing jobs, through a Job Retention bonus of £1,000 for continuously employing staff until at least January 2021. Following this, employers needed to be aware of further changes from 1st September, where:

  • CJRS would pay 70% of usual wages up to a cap of £2,187.50 per month for the hours furloughed employees did not work.
  • employers would still need to pay furloughed employees 80% of their usual wages for the hours they did not work, up to a cap of £2,500 per month. Employers would need to fund the difference between this and the CJRS grant themselves.
  • the caps are proportional to the hours not worked. For example, if an employee is furloughed for half their usual hours in September, employers are entitled to claim 70% of their usual wages for the hours they do not work up to £1,093.75 (50% of the £2,187.50 cap).
  • employers would continue to have to pay furloughed employees’ National Insurance (NI) and pension contributions from their own funds.

Swiftly moving to the end of September, employers now need to be aware of further changes from 1st October, those being:

  • HMRC will pay 60% of usual wages up to a cap of £1,875 per month for the hours furloughed employees do not work.
  • employers should continue to pay furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. Employers will need to fund the difference between this and the CJRS grant themselves.
  • the caps are proportional to the hours not worked. For example, if an employee is furloughed for half their usual hours in October, employers are entitled to claim 60% of their usual wages for the hours they do not work, up to £937.50 (half of £1,875 cap).
  • employers must still pay their employees at least 80% of their usual wages for the hours they don’t work, so for someone only working half their usual hours they’d need to pay them up to £1,250 (half of £2,500 cap), funding the remaining portion themselves.
  • employers should continue to pay furloughed employees’ National Insurance and pension contributions from their own funds.

As we prepare for what is being dubbed by some as the “second wave”, Mr Sunak has altered the make-up of the CJRS scheme for 6 months under a different guise of a Job Support Scheme (JSS). This is set to “allow firms to preserve viable jobs.”. This scheme is open to firms that had not previously taken part in the CJRS and forms part of the ‘Winter Economy Plan 2020’ by protecting jobs where businesses are facing lower demand over the winter months. For those taking up the scheme, from 1st November:

  • Employers will continue to pay the wages for the hours staff work.
  • For the hours not worked, the government and the employer will each pay one third of their usual wages (capped at £697.92 per month).
  • Employers will need to meet their share of the pay for unworked hours, and all employer National Insurance contributions and statutory pension contributions, from their own funds.
  • This means that employees will receive at least two thirds of their usual wages for the hours not worked.

To be eligible, employees must:

  • be registered on PAYE payroll on or before 23rd September 2020. This means a Real Time Information (RTI) submission notifying payment in respect of that employee must have been made to HMRC on or before 23rd September 2020
  • work at least 33% of their usual hours. The government will consider whether to increase this minimum hours threshold after the first three months of the scheme.

Claims can be made from 1st December and will be paid monthly. This scheme works in addition to the aforementioned Job Retention Bonus Scheme.

HMRC is providing webinars to further understand these changes. You can choose a date and time here.

Other support available to businesses and individuals can be found in our blog Coronavirus – the story so far.

Time For Britain To Get Back On Track

Road to recovery

Recovery has been touted as being high on the agenda. Following the first round of unprecedented support for jobs and the economy from the government, the Chancellor of the Exchequer, Rishi Sunak, unveiled his plans for the U.K.’s second phase of recovery.

As a fan of Crystal Palace FC, recent reports on Britain bouncing back, reminds me of the 2003/4 season when manager of the day, Iain Dowie, commented on his team’s “bouncebackability” when discussing their resilience in the wake of avoiding relegation and then going on to win promotion to the Premier League in the play-offs.

There have been different projections as to the shape of the U.K.’s recovery, and our own “bouncebackability”, most hoping for a ‘V’ shape, but only time will tell.

The first stage has already pumped in £160 billion to the economy, which includes £49 billion for vital services including the NHS, paying the wages of nearly 12 million people and supporting more than 1 million businesses with grants, loans and rate cuts, as identified in our previous blog Coronavirus: the story so far.

In an amazing and historic move, the second stage of recovery focuses on skills and young people, creation of jobs, investment in infrastructure, protection of existing jobs in hospitality by reducing VAT by 15% and an Eat Out to Help Out campaign offering discounts to diners.

Some of the details are listed below:

  • There will be a JRS bonus. U.K. employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021.
  • A new £2 billion Kickstart Scheme will be launched to create hundreds of thousands of new, fully subsidised jobs for 16-24 year olds across the country.
  • A total of £1.6 billion will be invested in scaling up employment support schemes, training and apprenticeships to help people looking for a job.
  • Bringing forward £8.8 billion of new infrastructure, decarbonisation, and maintenance projects.
  • £5.8 billion will be spent on shovel-ready construction projects to get Britain building.
  • To boost demand in the hard-hit sector of hospitality, a new Eat Out to Help Out discount scheme will provide a 50% reduction for sit-down meals in cafes, restaurants, and pubs across the UK from Monday to Wednesday every week throughout August 2020.
  • The rate of VAT applied on most tourism and hospitality-related activities will be cut from 20% to 5%.
  • To support jobs and growth in the housebuilding and property sectors there is a temporary increase to the Nil Rate Band of Residential SDLT (Stamp Duty) from £125,000 to £500,000 until 31 March 2021.

More information can be found on the government website.

For one, I look forward to the details being fleshed out over the coming days and weeks but I can see green shoots of recovery, and with sadness aside for what has passed and continues to impact our daily lives, the future is looking much, much brighter.

Coronavirus – the story so far

Coronavirus

Coronavirus is still dominating headlines across the world. During these difficult times, a lack of information can cause anxiety and distress to individuals and businesses alike.

As a business, we can empathise with the communities in which we operate.

As Chartered Accountants, we are uniquely positioned to provide a trusted source of advice and a platform with whom to share thoughts and ideas at this incredibly difficult time of uncertainty for both individuals and businesses alike.

We have pulled together some of the information available in one place and this will be updated regularly as and when we know more.

For those who have been attending a lot of webinars recently, I am sure you will have heard this many times, first, we will go through some general housekeeping rules for England: –

  • HANDS – Wash your hands regularly and for 20 seconds.
  • FACE – Wear a face covering in indoor settings where social distancing may be difficult, and where you will come into contact with people you do not normally meet.
  • SPACE – Stay 2 metres apart from people you do not live with where possible, or 1 metre with extra precautions in place (such as wearing face coverings or increasing ventilation indoors).

You can spread the virus even if you don’t have symptoms.

More information on this is provided on the Government websiteupdated 22nd September 2020

Scotland, Wales and Northern Ireland have set out their own independent guidance.

In these unprecedented times, the support for businesses and individuals outlined by the Chancellor, Rishi Sunak, is detailed on the Government’s website. The details provide a description of the support on offer, eligibility criteria and if applicable (or necessary), how to apply.

Businesses

Winter economy planupdated 24th September 2020. Here the Chancellor talks of the Job Support Scheme (JSS), the extension of SEISS and flexibilities on paying back loans.

Check if you can apply for a grant through the Kickstart Scheme updated 2nd September 2020

Apply for a grant through the Kickstart Scheme  updated 2nd September 2020

Kickstart Scheme employer contacts  updated 2nd September 2020

Check if you can apply for a grant as a representative of a group of employers through the Kickstart Scheme  updated 2nd September 2020

Kickstart Scheme promotional materials – updated 2nd September 2020

£20 million to improve small business leadership and problem-solving skills in the wake of coronavirus – updated 3rd August 2020

£20 million new funding to help smaller businesses recover from the effects of the coronavirus pandemic – updated 30th July 2020

Register your business for the Eat Out To Help Out Scheme updated 12th July 2020

Flexibly furloughing employees – updated 1st July 2020

Can your business open from 4th July?updated 23rd June 2020

Guidance for England only at this time.

Help and support if your business is affected by coronavirusupdated 29th May 2020

Watch videos and register for the free webinars to learn more about the support available to help you deal with the economic impacts of coronavirus.

Safety guidance for returning to workupdated 11th May 2020

New funding to support dairy farmers through coronavirusupdated 6th May 2020

Top-up to local business grant funds schemeupdated 2nd May 2020

Coronavirus bounce back loan scheme (BBLS) – updated 27th April 2020

Finally, the Government has realised that not all businesses are equal. This option is targeting small and medium-sized businesses with loans from £2,000 to £50,000 and will launch 4th May 2020.

Government launches business support finder – updated 20th April 2020

Support for businesses through the Coronavirus Job Retention Scheme (JRS)

U.K. wide. Under the coronavirus JRS, all U.K. employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis.

There will be a JRS bonus. U.K. employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021 – updated 8th July 2020

Claims for periods ending on or before 30th June 2020 should be submitted by 31st July 2020. This is the last date to make those claims. Employers need to have made a claim at any point on or before 31st July to be able to make a claim for future months.

From 1st August 2020 the scheme will no longer fund employers’ National Insurance (NI) and pensions contributions for furloughed employees. Employers will have to make these payments from their own resources.

From 1st September 2020 employers will have to start contributing to the wages of furloughed employees. Grants will be for 70% of usual wages in September and 60% in October, but furloughed employees will continue to be entitled to receive at least 80% of their usual wages. Employers will have to make up the difference from their own resources.

More details available from the government website.

Webinar for changes to JRS, claims, flexible furloughing and key dates

For claim periods starting on or after 1 July, you can download a template if you’re claiming for 100 or more employees and upload this when you claim – updated 19th June 2020

Work out 80% of your employees’ wages to claim through the coronavirus JRS – updated 28th May 2020

Find out how to calculate 80% of your employee’s wages, National Insurance contributions (NICs) and pension contributions if you’ve furloughed staff due to coronavirus (COVID-19).

Treasury Direction made under Sections 71 and 76 of the Coronavirus Act 2020 – updated 22nd May 2020

Extended until the end of October with furloughed workers able to return to part-time work from July with the Government topping up the balance of wages. Employers using the scheme will be asked to contribute towards the cost of paying people’s salaries from August. This cost will gradually increase in September and October. The scheme will close for new entrants from 30 June. However, from this point, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30‌‌ June, making 10 June the last date an employer can furlough an employee for the first time. Employers will have until 31‌‌ July to make any claims in respect of the period to 30‌‌ June. Updated 29th May 2020

Further support for employers and agents on how to calculate claims with this extra flexibility will be available by 12‌‌ June, including webinars and detailed online guidance.

Step-by-step guide to claim JRS for employersupdated 11th May 2020

JRS up and runningupdated 20th April 2020

Coronavirus JRS YouTube information to prepare for upcoming claimsupdated 9th April 2020

Support for businesses through deferring VAT payments

U.K. wide. The Government will support businesses by deferring VAT payments for 3 months to the end of June 2020, albeit that VAT returns must still be filed on time.

Support for businesses through deferring Income Tax payments

U.K. wide. The self-assessment payment on account, that is ordinarily due to be paid to HMRC by 31st July 2020 May now be deferred until January 2021.

Support for self-employed through the Self-employment Income Support Scheme (SEISS)

SEISS will support self-employed individuals (including members of partnerships) whose income has been negatively impacted by COVID-19.

Webinar on claiming SEISS

The Government will start contacting those who are eligible in the week commencing 4th May 2020.

The Chancellor announced an extension to the SEISS. Eligible self-employed people will be able to claim a second and final SEISS grant in August; this will be a taxable grant worth 70% of their average monthly trading profits for three months, paid out in a single instalment and capped at £6,570 in total.

Claims for the first SEISS grant, which opened on 13‌‌ May, must be made no later than 13‌‌ July. Eligible self-employed people must make a claim before that date to receive the first SEISS grant (a taxable grant of 80% of their average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total).

The eligibility criteria for the second grant will be the same as for the first grant. People do not need to have claimed the first grant to claim the second grant but the application must be made by the eligible individual and not an agent as this will trigger a fraud alert and result in significant delays to payment. Updated 29th May 2020

SEISS Eligibility checker

The application process goes live on 13th May 2020 and it is recommended to have already set up your Government Gateway account and have the relevant information to hand, such as, National Insurance number and Unique Taxpayer Reference (UTR).

Support for businesses who are paying sick pay to employees

U.K. wide. The Government will bring forward legislation to allow small and medium-sized businesses to reclaim statutory sick pay (SSP) paid for staff sickness absence due to coronavirus.

SSP Rebate Scheme set to launch 26th May – updated 19th May 2020

Check if you can claim back SSP paid to employees due to coronavirus updated 28th May 2020

If you’re an employer, find out if you can use the Coronavirus Statutory Sick Pay Rebate Scheme to claim back employees’ coronavirus-related Statutory Sick Pay (SSP).

Webinar on claiming your Coronavirus SSP rebate

Furloughed drivers and recording mobile working time – updated 28th May 2020

For operators and furloughed drivers on EU mobile working time rules and EU and AETR drivers’ hours and tachograph rules.

Support for retail, hospitality and leisure businesses that pay business rates

England only. Businesses in the retail, hospitality and leisure sectors will not have to pay business rates for the 2020-21 tax year.

Support for nursery businesses that pay business rates

England only. Businesses in the nursery sector will not have to pay business rates for the 2020-21 tax year.

Support for businesses that pay little or no business rates

Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief.

Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000.

Support for businesses through the Coronavirus Business Interruption Loan Scheme (CBILS) – updated 3rd April 2020

The CBILS is offering loans of up to £5 million for SMEs with turnover up to £45M through the British Business Bank. To expedite the payment of funds, and following further guidance from the Government, Personal Guarantees will no longer be required.

Support for large businesses though the Coronavirus Large Business Interruption Loan Scheme (CLBILS) – updated 3rd April

Loans of up to £25 million to firms with an annual turnover over £45 million and up to £50 million to firms with an annual turnover over £250 million. Expanded to now cover all viable firms as those with turnover greater than £500 million were initially excluded (updated 16th April 2020). Usual credit checks will be performed but this will give banks the confidence to lend to many more businesses which are impacted by coronavirus. Facilities backed by a guarantee under CLBILS will be offered at commercial rates of interest.

This scheme will launch 20th April 2020 and demand is expected to be high.

Support for larger firms through the COVID-19 Corporate Financing Facility

U.K. wide. A new lending facility from the Bank of England to help support liquidity among larger firms, where the BOE will buy short-term debt, helping firms bridge coronavirus disruption to their cash flows through loans.

Support for businesses paying tax: Time to Pay service

U.K. wide. All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time to Pay service. HMRC’s dedicated helpline on 0800 0159 559

Commercial insurance

Protection from eviction for commercial tenants

Extension of Business Improvement Districts (BIDs) arrangements

Support for businesses in Scotland, Wales and Northern Ireland

Business Support Helpline(England) Telephone: 0300 456 3565 Monday to Friday, 9am to 6pm

Also available on Twitter / Facebook / YouTube

Find Business Support Scotland Telephone: 0300 303 0660 Textphone: 0800 023 2071 Monday to Friday, 8:30am to 5:30pm

Business Wales Helpline Telephone: 0300 060 3000 Monday to Friday, 8:30am to 5:30pm

Invest Northern Ireland Telephone: 0800 181 4422 Monday to Friday, 8:30am to 5pm

Alternatively, support for businesses from outside the Government.

Making Tax Digital (MTD) has been delayed by a year to April 2021 to allow companies more time to put in place digital links.

The controversial IR35 reform where private companies are responsible for working out the tax status of their contractors and freelancers has been delayed by a year to April 2021.

£750M extra funding for frontline charities – updated 8th April 2020

Billion pound support package for innovative firms hit by coronavirusupdated 20th April 2020

Individuals

To boost demand in the hard-hit sector of hospitality, a new Eat Out to Help Out discount scheme will provide a 50% reduction for sit-down meals in cafes, restaurants, and pubs across the UK from Monday to Wednesday every week throughout August 2020 – updated 8th July 2020

To support jobs and growth in the housebuilding and property sectors there is a temporary increase to the Nil Rate Band of Residential SDLT (Stamp Duty) from £125,000 to £500,000 until 31 March 2021 – updated 8th July 2020

Coronavirus: getting testedupdated 28th May 2020

Guidance on coronavirus testing, including who is eligible for a test and how to get tested.

Travel advice : coronavirus – updated 28th May 2020

Guidance for British people travelling overseas during the coronavirus (COVID-19) pandemic.

Check if your employer can use the coronavirus JRSupdated 28th May 2020

Find out if you’re eligible, and how much your employer can claim if they put you on temporary leave (‘furlough’) because of coronavirus (COVID-19).

Eligibility of employees for Job Retention Scheme (JRS) – updated 4th April 2020

Mortgage repayment holidays

Lenders are offering several ways to support their customers who have been affected by coronavirus. It is best to contact your lender directly to see how they can help. Be prepared for high call volumes and to wait for a significant amount of time. If you have a business bank manager, see if they can fast track your call.

Vulnerable individuals

Since the announcement on Sunday 22nd March of the distribution of 1.5 million letters to those who are most vulnerable to this virus and should self-isolate for 12 weeks, confusion has been met by those who do not identify with having any of the diseases and conditions that warrant being at high risk. NHS Digital have posted a statement on this, but if you are in any doubt, please contact your local GP’s office.

Claiming Universal Credit / Employment and Support Allowance (ESA) – updated 19th March

  • those affected by coronavirus will be able to apply for Universal Credit and can receive up to a month’s advance up front without physically attending a job centre
  • the 7 waiting days for ESA for new claimants will not apply if they are suffering from coronavirus or are required to stay at home – so it will be payable from day one

Statutory sick pay (SSP) for employees and self-employed – updated 19th March

  • people who cannot work due to coronavirus and are eligible for SSP will get it from day one, rather than from the fourth day of their illness – the Government intend to legislate so this measure applies retrospectively from 13 March 2020
  • SSP will be payable to people who are staying at home on government advice, not just those who are infected, from 13 March 2020 after regulations were laid on 12 March 2020 – employers are urged to use their discretion about what evidence, if any, they ask for
  • if employees need to provide evidence to their employer that they need to stay at home due to coronavirus, they will be able to get it from the NHS 111 Online instead of having to get a fit note from their doctor – this is currently under development and will be made available soon
  • self-employed claimants on Universal Credit who are required to stay at home or are ill as a result of coronavirus will not have a Minimum Income Floor (an assumed level of income) applied for a period while affected

Support for the bereavedupdated 28th May 2002

Information to help bereaved families, friends or next of kin make important decisions.

What next?

If you require financial support, research the above steps to act as soon as possible and / or contact your accountant. DO NOT DELAY!

Identify areas of your business where cash flow can be maximised. Speak with your customers for prompt payment and suppliers to understand if payments can be put on hold.

If you require further support, please visit our services page to see what Zen Finance Solutions can do for your business. Most importantly, we are all in this together, so be mindful, respectful and stay safe.