National lockdown prompts furlough extension
On 5 November 2020, the day on which England’s second lockdown came into force, Chancellor Rishi Sunak announced that the Coronavirus Job Retention (or furlough) Scheme was to be extended until March 2021. Prior to the announcement, the furlough scheme had been due to end at the end of October, with the new Job Support Scheme (JSS) set to kick in after that. The announcement of a second national lockdown prompted an extension until December. Acknowledging the strain UK families and businesses were currently under, however, Mr Sunak announced that the furlough scheme would now run until March and would apply to all nations of the UK.
What are the rules this time?
In August, the furlough scheme began to change. Government support began to taper off in anticipation of the initiative’s closure. By October, employers were footing the bill for employer National Insurance and pension contributions, as well as 20% of their employees’ wages, with the government providing the remaining 60%. However, in acknowledgement of the extreme financial hardship many firms are facing going into winter, and to give businesses the best chance of recovery in the coming months, the government will once again be paying 80% of eligible workers’ salaries until 31 January, with employers only responsible for National Insurance and pension payments. The policy will then be reviewed in January to see whether the economy is improving enough to ask employers to contribute more.
It should be noted that the Job Retention Bonus will no longer be available in February 2021, as the furlough scheme will still be in place; instead, a retention incentive alternative will be introduced at a more appropriate time.
Who can benefit?
Businesses of any size, whether private limited companies, not-for-profit or charitable organisations, can claim on the Coronavirus Job Retention Scheme. Employees can also be on any type of contract, including full-time and part-time employees, as well as those on flexible or zero-hours arrangements and agency workers. Employees must have been on the company’s payroll by 23:59 on 30 October at the very latest, meaning that a Real Time Information submission, notifying HMRC of payment to that employee, must have been made on or before this date. Importantly, neither the employer nor the employee needs to have previously claimed, or been claimed for, under the scheme to be eligible for the extended version.
Can I claim any other support?
The government is also introducing a system of monthly grants for businesses, up to the value of £3,000 depending on the rateable value of the premises should businesses require to close:
- Premises with a rateable value of <£15k: £1,334 per month, or £667 per two weeks
- Premises with a rateable value of £15k – £51k: £2,000 per month, or £1,000 per two weeks
- Premises with a rateable value of >£51k: £3,000 per month, or £1,500 per two weeks
A fund of £1.1bn will also be provided to local authorities to make one-off support payments over the coming months.
What about the Self-Employed Income Support Scheme (SEISS)?
The SEISS has now been extended until April 2021, with grants paid in two lump sum instalments across two three-month periods. The first grant will cover the period between 1 November 2020 and 31 January 2021; self-employed workers will receive a taxable grant covering 80% of average monthly trading profits for this period, to be paid in a lump sum capped at a total of £7,500. The level of support available from the second grant has yet to be reviewed.
Expert HR support in difficult times
With rules and restrictions changing almost daily, it’s inevitably hard for employers to keep up with their HR requirements, especially when they’re fighting for their business’s survival. If you need help with claiming on the extended furlough scheme, adhering to coronavirus rules in your workplace, or simply require day-to-day support with policies, procedures and other administrative work, then please get in touch with our HR expert, Catherine Dean, at email@example.com.