01 Jun Coronavirus Job Retention Scheme (CJRS) – update 01 June 2020
From 1st of July 2020, it will be possible to bring previously furloughed employees back to work on a part-time basis. The government will continue to pay 80% of the wages for any of the normal hours the employee does not work up until the end of August. This flexibility has come a month earlier than previously announced to help fast-track the process of getting people back to work.
Employers can decide the hours and shift patterns that employees will work on their return and will be responsible for paying their wages in full while working. This means that employees can work as much or as little as the business needs with no minimum time that you can furlough staff for.
The working hours arrangement agreed with the employees must cover at least one week and be confirmed to the employee in writing. When it comes to claiming the CJRS grant for furloughed hours, a report and claim must be made for a minimum period of a week. Claims can be made for longer periods such as on a monthly or two weekly cycle if that is preferable. You will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.
If employees are unable to return to work, or there is no work for them to do, they can remain on furlough and you can continue to claim the grant for their full hours under the existing rules.
From August, the government grant provided through the job retention scheme will be slowly tapered.
- In June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work – employers will have to pay employees for the hours they work.
- In August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed.
- In September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500.
- In October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500.
- The cap on the furlough grant will be proportioned to the hours not worked.
For smaller employers, some or all of your employer NIC bills will be covered by the Employment Allowance, so you should not be significantly impacted by that part of the tapering of the government contributions.
Around a quarter of CJRS monthly claims relate to wages that are below the threshold where employer NICs and auto enrolment contributions are due, and so no employer contribution will be required for these furloughed employees in August.
The CJRS will close to new entrants from 30 June. From this date onwards, you will only be able to furlough employees that have been previously furloughed for a full three-week period prior to 30 June.
Therefore, the final date that you can furlough an employee for the first time will be 10 June for the current three-week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.
Staying up to date
Our ethos at Infinity has always been that we are not just your accountants, but we are your partners in business and in these difficult times this has never been more important. We want to assure you all that we are doing everything we can to help you and should you have any question, big or small, please get in touch, we are here to help.
In the coming weeks we will be releasing various documents with support and help through various channels.
Please connect with our team on LinkedIn and Twitter using the following links.
Simon Cowie – Manging Director – https://www.linkedin.com/in/simon-cowie-ab36714b/
Greg Houston – Associate Director – https://www.linkedin.com/in/greg-houston-95900a42/
Mark Rhynas – Tax Manager – https://www.linkedin.com/in/mark-rhynas-att-1712265b/
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