COMPLIANCE
Goodbye CJRS, hello JRS bonus
SamanthaMannMCIPPdipMAAT, CIPP policy and research technical lead, outlines the rules and provides an update on developments
I t was 20 March when substantial change was heralded to the UK working population, as the chancellor of the exchequer launched the coronavirus job retention scheme (CJRS) in advance of the prime minister announcing the UK- wide lockdown. (Which reminds me, my daughters still owe me a Mothering Sunday treat.) “We will stand by you and we hope you will stand by your employees” was the call from the chancellor, as businesses were instructed to close, and workers told to “work from home where you can”. These announcements not only signalled substantial change to the working situation for thousands of payroll practitioners, but also a significant need to adapt to a change in payroll methodology, in a bid to ensure that furlough pay matched the claim that would ultimately be made when the CJRS became live. 2020 will be a year not to forget.
government for employers, whilst still retaining the 80% monthly cap or £2,500 for the employee. In August, the employer took on the cost of class 1 secondary (employer) National Insurance contributions (NICs) and pension costs for the hours not worked, as well as for the hours worked. In September, CJRS claims reduced to 70% of wages, to a cap of £2,187.50, for the hours that the employee did not work, requiring the employer to make up the shortfall. From October, CJRS claims reduced further to 60% of wages, to a cap of £1,875 for the hours the employee was not required to work, requiring the employer to make up the shortfall. Whilst delivering confirmation that the CJRS would indeed come to an end, the chancellor, in a bid to protect against job loss, introduced the job retention scheme (JRS) bonus (‘the bonus’). Usage and cost By midnight on 16 August a total of 9,600,000 jobs had been furloughed, affecting 1,200,000 employers with a total claimed of £35.4 billion. These numbers figured in the launch publication of HM Revenue & Customs’ (HMRC’s) experimental statistics, gathered by the Office of National Statistics. The statistics, which are subject to change, are published on a monthly basis. Data has been gathered using information submitted to HMRC, through the CJRS claim service and also the PAYE (pay as you earn) real time information (RTI) process.
The publication revealed that the employments furloughed represented 32% of eligible employments, and that 61% of eligible employers were claiming. Unsurprisingly, the sector most impacted by furlough with the highest rate was accommodation and food services with a furlough rate of 77%. The wholesale and retail sector, however, furloughed the highest number of employments at over 1,900,000. There has been broad consistency in furlough rates across the nations of the UK. The West Midlands region of England has the highest take-up rate at 34% against the UK average of 32%. Men have been furloughed at a higher rate than women: 34% and 29% respectively. The full and detailed release can be found at https://bit.ly/2QZMvBb, where further information is available about experimental statistics which are currently in the test phase. Eligibility for the bonus The scheme will follow on from the CJRS, and at the time of writing we are still waiting for the finer details. Where an employer is eligible, they will receive a bonus of £1,000 per employee to be paid in February. To be eligible for the bonus the employer must have submitted an eligible claim under the CJRS for the employee. All employers are eligible for the scheme including recruitment agencies and umbrella organisations. The employee must be returned to employment during November, December and January, and earn an average of £520 per month. They don’t need to have earned that amount each month, but must have been paid an amount, submitted through PAYE RTI, and have earned a total of £1,560 over the three months.
Where we are now The CJRS has been delivered in two
phases, as the chancellor moved towards ending the economy’s reliance upon the scheme, and the UK opened once again for business. The period 1 March–30 June saw a programme of full furlough, which, if taken up, prevented employees from completing any work for their employer. The period 1 July through to 31 October features flexibility in the furlough process, which has enabled employers to bring employees back to work where they could. It also marked the beginning of the tapering and ending of financial support from the
...gathered using information submitted to HMRC, through the CJRS claim service and also the PAYE RTI process.
| Professional in Payroll, Pensions and Reward | October 2020 | Issue 64 28
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