The UK Chancellor recently announced that the Coronavirus job retention scheme (CJRS), also known as the Furlough Scheme will be extended until the end of March 2021 for all of the UK. The Government will pay 80% of workers’ monthly wages for furloughed staff while they are unable to work due to the coronavirus restrictions. Employers will only need to pay the cost of pension and national insurance contributions. These changes give businesses significant reassurance over an uncertain winter.
This move was needed because of the economic situation caused by the Covid-19 pandemic, which resulted into a four-week lockdown from 5th November 2020.
The £1,000 payment from the UK Government to firms for retaining furloughed staff until the end of January 2021 will now be scrapped because of the extension to the Coronavirus Job Retention Scheme (Furlough Scheme).
Employers small or large, charitable or non-profit, are eligible for the extended Job Retention Scheme. Businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time, and will only be asked to cover National Insurance and employer pension contributions which, for the average claim, accounts for just 5% of total employment costs.
One of the key problems with the recent announcement is that some employees will have already been made redundant at the end of October due the Job Retention Scheme ending on 31st October 2020. Announcing the extension of the furlough scheme in November would therefore, already be too late for those employees that were made redundant in October 2020.
Due to this late timing of the Government’s announced, employees who were made redundant at the end of October 2020 that were employed by the company before the 23rd September 2020, can be re-instated (i.e added back to the company’s payroll) then put on furlough until March 2021. The decision as to whether an employee would be added back to a company’s payroll is down to the company.
Businesses required to close in England due to local or national restrictions will be eligible for the following:
Mortgage payment holidays that was due to end on 31st October 2020 has also been extended. Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.