New furlough arrangements
The Coronavirus Job Retention Scheme, more commonly known as the Furlough Scheme, was due to finish on 31 October 2020 to be replaced by the Job Support Scheme (“JSS”). In the wake of the Prime Minister’s announcement on 1 November 2020 that a second, UK-wide lockdown would start on 5 November 2020, the government has decided to retain the Furlough Scheme until 31 March 2021. The JSS and the Job Retention Bonus are both temporarily suspended.
The furlough scheme is open to all UK businesses with a PAYE scheme in place, regardless of whether or not they have already taken advantage of the scheme (the cut-off date of 10 June 2020 no longer applies). The government will reimburse employers up to 80% of their employees’ wages (up to a maximum of £2,500 per month) providing the employee was employed on or before 23.59 on 30 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. The percentage reimbursed by the government will be reviewed in January with employers possibly being asked to increase their contribution, depending on the state of the economy, for February and March.
Employers can rehire anyone that was on the payroll on 23 September 2020 and who were made redundant or stopped working for their employer after that date. Employers are responsible for paying National Insurance and employer’s pension contributions for hours not worked.
Employers can take advantage of either full or flexible furlough, bringing back employees to work part-time as the business requires and just claiming the grant for the hours not worked. Employers must claim the grant for at least seven consecutive calendar days and are free to top up their workers’ wages to the full amount. While HMRC’s system is being updated, employers will be paid in arrears. Once it is up and running, businesses will be paid upfront.
We will update this information when the government releases further details of the scheme’s operation.
Business support grants
Grants to help those businesses in England (business grants are devolved) required by the government to close will be eligible for the following:
|
Property rateable value |
Per month |
Per two weeks |
|
£15k or under |
£1,334 |
£667 |
|
£15k-£51k |
£2,000 |
£1,000 |
|
£51k or over |
£3,000 |
1,500 |
The government has confirmed that removal firms, estate agents and tradespeople can continue to work but must follow Covid safety guidelines.
Local authorities have also been given additional funds totalling £1.1bn to support local businesses.
Business loans
Businesses who have not yet taken up any of the government backed loan products, such as a Bounce Back or CBILS loan, still have time to do so. The deadline for approvals of these loans has been extended to 30th November 2020.
Mortgage holidays
Mortgage payment holidays will continue. Those borrowers unable to pay their mortgage due to Covid-19 but who have not yet applied for a mortgage payment holiday will be entitled to a six month holiday. Those who have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.
If you need any advice, please contact one of our employment lawyers.
