After being in place for six months, there are now only two months left of the Coronavirus Job Retention Scheme (CJRS). Naturally this is assuming the scheme will close as currently planned on 31 October 2020 – however any change is possible this year! With staged opening over the last few months for the different sectors, it could make sense to align specific rules to those still (or who will) be largely impacted at this date.
This month marks the first of the two staged percentage reduction of the amount you can claim. From 1 August 2020 you were no longer able to claim for any employer’s national insurance or pension costs. From today you can only claim 70% of the gross wage of your staff member, whilst still be required to pay them a minimum of 80% of their ‘usual’ wages as defined by HMRC.
This means employers will need to fund this 10% (along with the associated national insurance and pension on the full wages). Next month you can only claim 60% and therefore meaning employers will need to fund another 10%. The maximum monthly claimable amount is also adjusted down respectively from the £2,500 to £2,178.50 in September and £1,875 in October.
After the scheme closes, as planned, on 31 October, the final government support for businesses in relation to their previously furloughed staff is the ‘Job Retention Bonus’ (JRB). This bonus is a one off £1,000 per previously furloughed employee who has been continuously employed as at 31 January 2021.
During 1 November 2020 and 31 January 2021 this qualifying employee must have been paid a minimum of £520 per month on average (so £1,560 across the three months). This is the national insurance lower earnings limit, and the limit has been set to ensure jobs are ‘meaningful’ and ‘well paid’. Further guidance on what can be included as earnings is due to be issued this month.
There are some basic eligibility requirements in order to claim such as having update to date RTI records to the end of January 2021. The employee you claim the JRB for cannot be serving their contractual notice period where such period started before 1 February 2021. All previously submitted CJRS must be accurate meaning that any amendments that you need to make must have been notified and actioned.
From February 2021 you (or your agent) will be able to make the claim and further guidance on the process is due to be issued this month. The JRB is taxable and therefore you must include the whole amount as income when calculating your taxable profits for Corporation Tax or Self-Assessment.