MANY businesses had hoped for an extension to the Job Retention Scheme 2 (JRS2) that is due to end on October 31, 2020, however the Chancellor has chosen a different route.

While being consistent by calling it JRS3, it isn’t an extension to the current regimes in place and it appears that it will operate in a very different way to either JRS1 or JRS2.

Currently, what we know is that for each furloughed employee kept employed until at least the end of January 2021, from February 2021, payments will be made of £1,000 per employee retained, as long as they earn above the Lower Earnings Limit of £520 per month. The Treasury department has said further details on this scheme will be announced at the end of this month, which probably means guidance will follow later.

What we don’t yet know, or understand, is how this scheme will operate. Will it be for employers to prove in some way people are/have been furloughed? Will there be some form of economic test to prove that without JRS3 these individuals would have been laid off? Will HMRC provide an online tool to submit a claim similar to JRS1 and JRS2, or will there be an entirely new way of claiming?

Will the employer submit information each pay period even though payments won’t be made until February, or will there just be one claim at the end of January? Will HMRC cross check with payroll records via the real time information submission that is made on or before pay day?

Inevitably, there are lots of questions, which will hopefully be answered soon, however, whether this incentive is enough to encourage businesses to bring employees back and retain staff long term remains to be seen.

If you’d like to discuss in more detail your business cash flow and whether current government schemes – or those just proposed by the Chancellor in his Summer Statement – can be utilised to support your business, call Helen Robinson on 07392 085826.