Coronavirus Job Retention Scheme Mark 3

Rumours of the demise of CJRS appear to have been exaggerated, and it looks like it is now with us until the end of March. It is much like the arrangements in August 2020, but much has also changed. We set out some salient points below, but there is no substitute for reading the full HMRC guidance.

Basics

Employers can claim 80% of pay paid to employees on furlough. The government will review this contribution level in Jan 21.

You can fully or partially furlough your employees. You pay for the worked hours as per contract, HMRC will pay 80% of the cost of wages for the furloughed hours. You can top up with the 20% if you wish.

The employer pays for all Employer’s NIC and Employer’s pension contributions.

You can furlough any employee who was on an RTI return on or before 30 October 2020.

Reference pay

The furlough calculation is based on wages paid in the “reference” period. This can differ between employees depending on various criteria. Please check this carefully – do not hesitate to get in touch with us if you are confused. It is confusing and irrational.

Documentation

It is important to document any changes in furlough arrangements even if the hours change on a weekly basis because of shifts or some other reason. Changes must be in writing to the employee but you are not required to wait for a response.

Keep all records concerning hours worked and hours furloughed and your calculations. All records and contract changes must be kept for 6 years.

Deadlines

Watch out for strict deadlines for claim submissions – make sure you have claimed for any Furlough payment up to an including 31 October by 30 November. For CJRS3, you must claim within 14 days of month end. So all claims to 30 November 2020 must be made by 14 December 2020.

Claiming in advance

You can claim up to 14 days before pay day. Beware the complexity of claiming in advance for variable hours staff. If they end up doing different hours from the claim then you will need to correct the claim the following month, including correcting their pay and pensions.

Full HMRC guidance is here.

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