In my last article in the August/September issue, I talked about the U.K.’s “Eat Out to Help Out” government scheme that was delivered throughout August in a bid to encourage people in the U.K. out of our homes and back into pubs, restaurants, cafes, and other establishments that allowed eating, inside or outside.

This government initiative provided a 50% discount (capped at £10 per head) when eating out on Monday, Tuesday, and Wednesday. Now, we await the final statistics as to how much this creative programme has cost the U.K. government. So far, it has the appearance of being a success, or, at the very least, has provided a “feel good” policy in support of family and friends gathering together after the long lockdown.

As of 27 August, a reported 84,700 individual restaurant premises had registered on the Eat Out to Help Out programme, with 130,000 claims having been made to Her Majesty’s Revenue and Customs (HMRC) to the value of £522 million, covering 100 million meals.

I am pleased to say I enjoyed a meal or two myself with my loved ones.

Summer Statement

As successful as the program seems to be, a couple of discount meals is not making up for the constant flux that we in the payroll profession have faced as the Chancellor of the Exchequer Rishi Sunak battles to deliver government support aimed at protecting jobs, all while not being seen to reverse policies. “The Coronavirus Job Retention Scheme must end,” he said in part.

2020 will be remembered for many reasons. Here in the U.K., we will remember it as being the year that the Chancellor of the Exchequer just kept on delivering short-term plans aimed at protecting jobs in a bid to support the economy.

Let us recap some of the key announcements that impacted U.K. payroll through recent months of 2020:

• 8 July—Summer Economic Statement–introduced the Job Retention Bonus (JRB)
• 25 September—Winter Economy Plan–introduced the Job Support Scheme (JSS)
• 9 October-–JSS expanded
• 22 October-–Financial Support for Jobs and Businesses
• 31 October—JSS postponed as Coronavirus Job Retention Scheme (CJRS) is extended to 30 November
• 5 November—CJRS extended to 31 March, JSS postponed, and JRB postponed/cancelled

Winter Economy Plan

During his summer statement, the Chancellor told us that there would never be a right time to end the CJRS, so he would close it on 31 October. He also said the JRB would be brought in to add a measure of support for employers that retained jobs throughout the winter months of November, December, and January.

As part of his Winter Economy Plan, the Chancellor confirmed that the JSS would run for six months, starting on 1 November.

On the evening of 30 October, full guidance for JSS was finally published, and less than 24 hours later Prime Minister Boris Johnson announced that England needed to prepare itself to enter another period of lockdown, starting on 5 November.

Since then, we have had news that both the JRB and JSS have been postponed/cancelled, with the CJRS now extended to 31 March 2021.

Extension of CJRS

On its final day of operation, CJRS received a reprieve and is back into action, and at the same levels of support as we last saw in August 2020.

The scheme has been extended until 31 March 2021. The level of support is 80% of an employee’s usual pay, up to a cap of £2,500 per month. This will continue until 31 January 2021. The U.K. government will reassess the situation in January and may opt to alter the level of funding from February 2021.

Employers will be required to pay the associated on-costs for all employer National Insurance (NI) or auto-enrolment pension contributions.

Elements of the extension to the scheme are not dissimilar to the previous, original version of the scheme, but there are some new considerations for anyone intending to make a claim under the extended version of the scheme.

Fix Risk Furlough Fraud

There is no requirement for an employee to have been claimed for, or the employer to have claimed, under the previous version of the CJRS.

In a bid to reduce the risk of furlough fraud, which happened with the previous version of the scheme, HMRC will publish the names of any employers making use of the extended CJRS, from December 2020 onwards.

Employers can place employees on full furlough, or they can opt for flexible furlough. In this instance, the employer must pay them for any hours that they work but can claim the grant for any of the usual hours that they are placed on furlough.

Eligibility

Employers are able to claim for employees who were on Pay As You Earn (PAYE) payroll as of 30 October 2020, but they must have made a PAYE Real Time Information (RTI) submission including details of earnings for that employee to HMRC between 20 March 2020 and 30 October 2020.

As before, employees can be on any type of employment contract.

In terms of claim calculations, for employees who meet the eligibility criteria and have been furloughed previously, the same calculations for determining the reference pay and usual hours must be used as under the initial scheme.

Where the employees meet the criteria of the extended scheme but were not previously eligible for CJRS, alternative calculations for reference pay and usual hours are needed. Employees who were hired between 20 March 2020 and 30 October 2020 and are classed as being on fixed pay will have the amount of reference pay based on the last pay period before 30 October 2020.

Those hired between the same dates who are on variable pay will have their calculation based on the average pay for tax year 2020-21 (taking the later of the start date of their employment, or 6 April 2020) up to the start date of their period of furlough.

Employees who have been made redundant or stopped working for their employer after 23 September 2020 can be re-employed and claimed for. However, they must have been included on a Full Payment Submission (FPS) sent to HMRC between 20 March 2020 and 23 September 2020.

Employees must not undertake any work for their employer that makes money or provides services for them during the hours that they are recorded as being on furlough, but they can participate in training or volunteer for another organization. They can even work for another employer should their contract of employment allow them to do so.

During furlough, employees retain all employment rights, including entitlement to Statutory Sick Pay (SSP), annual leave, maternity, and other parental rights. They also retain rights against unfair dismissal, redundancy entitlement, and payment of National Minimum Wage (NMW) for hours worked.

Employer-Employee Arrangements

There is no minimum furlough period, and multiple flexible furlough agreements can be made where necessary. A claim period must be for a minimum of seven consecutive calendar days.

Employers must discuss any changes to employment contracts with affected staff. They must confirm these in writing and retain a record of this for a minimum of five years.

In addition, records of how many hours an employee works, alongside the number of hours they are placed on furlough, must be kept for a minimum of six years.

Claims Process

Claims under the extended CJRS will be submitted via an online portal on GOV.UK, in line with the previous version of the scheme, and could be made from 11 November. Claim periods must begin and end in the same calendar month and must not overlap.

In a tighter schedule than previously observed, claims must be submitted by day 14 of the month following the month the claim relates to. Agents who are authorised to act on behalf of clients for the purposes of PAYE will be able to submit claims for them.

Closing

It was unsurprising that the Chancellor would be called upon to deliver further government support measures once Prime Minister Johnson had announced the need for another lockdown to contain the spread of the coronavirus. The message seems to be clear that the U.K. government believes that employment is vital both for the economy and for the individual.

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Samantha Mann, MAAT, MCIPPDip, is Policy and Research Technical Lead for the Chartered Institute of Payroll Professionals (CIPP).