The Chancellor has recently announced that with effect from 1^st November the Job Support Scheme (JSS) which was due to replace the previous furlough scheme has now been scrapped and replaced by the new Coronavirus Job Retention Scheme (CJRS). 

The new scheme is a lot more straightforward. Basically you can furlough anyone who was on the payroll before 23^rd September and reported to HMRC on a Realtime Submission (RTI). They need not to have been furloughed before as was the requirement in the previous scheme. The employer does not need to have used the scheme before to qualify and so as long as the RTI submission requirement above has been met, the new claims will be allowed.

Broadly the same rules apply as before. The employer can claim 80% of the furloughed salary for the employees (or Directors) of the business (Limited Company or otherwise). The employees can work all or part of their hours. If working some of their normal contracted hours they will be paid for these along with the furloughed part. These hours must be agreed in advance with the employee. The full furlough payment must be made to the employee. The employer must still pay any Pension payments and National Insurance due. This part is not clear but I assume that HMRC refers to the employers’ contributions for both and not the employees’ deductions.

Employees (and Directors) can also be part furloughed as mentioned above as well as completely furloughed to avoid redundancy. If a person works one day per week as opposed to a normal five day week, the furlough claim will be their normal wage, say £500.00, divided by five to give the normal part (£100.00) plus the balance of £400.00 x 80% = £320.00 making a total of £420.00 payable before tax, National Insurance and Pension deductions. These furlough claims are subject to a maximum of £2,500.00 per person per period. Here again they are not specific but I assume that the period referred to is a calendar month.

HMRC have promised more information in due course and as soon as it is available, I will update you. This scheme is currently expected to run until the end of March next year. Meanwhile, please email myself or telephone Andrew or Tracey on 01702 887885.