Mask - Covid 19

Briefing 20 – 22nd December

Coronavirus Job Retention Scheme (CJRS) – update

The Chancellor announced last week that the CJRS (Furlough) scheme has been extended until the end of April 2021.

This provides businesses and employees across the UK with certainty into the New Year.

The Chancellor said he would review the employer contribution element of the CJRS in January.

At present, the Government will continue to pay 80% of the salary of employees for hours not worked until the end of April. Employers will only be required to pay wages, National Insurance Contributions (NICS) and pensions for hours worked; and NICS and pensions for hours not worked.

We have provided the details of the Scheme in earlier Briefings, however please see below for ease of reference.

Coronavirus Job Retention Scheme (CJRS) – also known as the Furlough scheme.

This Scheme will now remain open until April 2021, with employees receiving 80% of their current salary for hours not worked, up to a maximum of £2,500. Businesses will have flexibility to bring Furloughed employees back to work on a part-time basis or Furlough them full-time, and will only be asked to cover National Insurance and Employer pension contributions which, for the average claim, accounts for just 5% of total employment costs for the hours the employee does not work. Hours worked and associated costs will be paid by the employer as normal.

·         This extended Coronavirus Job Retention Scheme (CJRS) will operate as the previous Scheme did, with businesses being paid upfront to cover wages costs.

·         Flexible furloughing will be allowed in addition to full-time Furloughing.

·         If an employee was furloughed between March and June 2020 any current furlough claims can only be made using their pay rate at this time, even if this has increased since June.

·         Changes from 01/12/2020 – The Furlough Scheme may no longer be used to cover Notice periods. Notice must now be paid by the employer.

Who is eligible?


·         All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS, however, the employee must have been on a payroll RTI submission at 30 October 2020.

·         The Government expects that publicly funded organisations will not use the Scheme, as has already been the case for CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted. All other eligibility requirements apply to these employers.


·         To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30 October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30 October 2020.

·         Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees.

·         Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Such calculations will broadly follow the same methodology as currently under the CJRS.

·         When claiming the CJRS grant for Furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days.

·         Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.

·         For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.

What support is being provided and employer costs:

·         For hours not worked by the employee, the Government will pay 80% of wages up to a cap of £2,500. The grant must be paid to the employee in full.

·         Employers will pay employer NICs and pension contributions, and should continue to pay the employee for hours worked in the normal way.

·         As with the current CJRS, employers are still able to choose to top up employee wages above the Scheme grant at their own expense if they wish.

Furlough Scheme

If we undertake your Company’s Payroll we shall be making contact over the course of this month so Furlough claims can be processed once the underlying Payroll has been completed. 

Business Loan Scheme

Further announcements were made in respect of the Bounce Back Loan Scheme and the Coronavirus Business Interruption Scheme.

In a move to ensure struggling businesses can access the support they need through continuing economic disruption, the Chancellor announced that he would be extending the Government guaranteed business loan Schemes until the end of March 2021.

These had been due to close at the end of January 2021.

The Government has already announced that more support will be available beyond March, through a successor loan scheme. More details of the scheme will be announced in due course.

Please find below links to the government information;

Bounce Back Loans Scheme

Coronavirus Business Interruption Loan Scheme 

Coronavirus Large Business Interruption Loan Scheme 

New Tier 4 Announced

We have not previously mentioned the “Tiering” system in earlier Briefings. However, due to the announcement made by the Prime Minister on Saturday, we felt it important to highlight what exactly being in a Tier 4 area means, especially has it has an impact on previous announcements in respect of Christmas arrangements

If you live in Tier 4 you must not leave or be outside of your home or garden except where you have a ‘reasonable excuse’. The comprehensive list can be found at the following link: Tier 4

For clients who have businesses in Tier 4, please contact us if you need support with Furlough claims. We would suggest you also watch your Local Authority’s website as no doubt further discretionary funds will be opening.


The Chancellor has confirmed that the Budget will be on the 3 March 2021. This will deliver the next phase of the plan to tackle the virus and protect jobs, so the extensions to the business loan and furlough schemes enable businesses to plan with certainty and access support in the first few months of the New Year ahead of the further update on wider Covid-19 economic support.


We have updates in respect of dealing with VAT after the transition period ends in respect of “Use and Enjoyment”

The current use and enjoyment provisions apply where the place of supply would be:

  • The UK, but the services are effectively used and enjoyed outside the EU, or
  • Outside the EU, but the services are effectively used and enjoyed in the UK.

Where these services are consumed both in the UK and by that customer outside the EU, the supply is apportioned, and VAT applied to the extent that they are consumed in the UK.

The Use and Enjoyment provisions apply to certain supplies of services and ensure VAT is accounted for where they are consumed. The following services are covered by the rules:

  • The letting on hire of goods – including the means of transport
  • B2B electronically supplied services
  • B2B telecommunication services
  • B2B repairs to goods under an insurance claim
  • Radio and television broadcasting services.

However, from 1 January 2021, the use and enjoyment rules will apply to where the place of supply would be:

  • The UK, but the services are effectively used and enjoyed outside the UK, or
  • Outside the UK, but the services are effectively used and enjoyed in the UK.

Therefore, If you are supplying services from the UK that come under “Use and Enjoyment” rules and are effectively used and enjoyed outside the UK, they will now be outside the scope of UK VAT.

In addition, when a UK service provider is invoicing a non-EU individual for services listed within VATA94 schedule 4a, paragraph 16(2), the place of supply is where the individual resides, therefore, outside the scope of UK VAT. See VAT notice 741a sec 12.

Schedule 4a, para 16(2) covers the following supplies:

  • transfers and assignments of copyright, patents, licences, trademarks and similar rights
  • acceptance of any obligation to refrain from pursuing or exercising a business activity
  • advertising services
  • services of consultants, engineers, consultancy bureaux, lawyers, accountants, and other similar services – data processing and provision of information, other than any services relating to land
  • banking, financial and insurance services
  • the provision of access to, or transmission or distribution through, natural gas and electricity systems and heat or cooling networks and the provision of other directly linked services
  • supply of staff
  • letting on hire of goods other than means of transport
  • emissions allowances

From 1 January 2021, this will extend to all non-UK consumers. This is confirmed in HMRC’s policy paper (see link below). ‘If you are supplying services that are treated as supplies from the UK to consumers outside the UK, your services are supplied where your customer belongs and so are outside the scope of UK VAT”.

Accounting for VAT on services between the UK and EU member states from 1 January 2021 – GOV.UK (



Stacey Yates

Stacey Yates


TEL: 01202 880384




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