As many of you will have heard there are changes coming into play to the CJRS from 1 July 2020 that all employers need to be aware of. We have summarised the main thinking points to trigger any actions you may need to take in planning.
- The scheme will close to new entrants by 30 June 2020. If you haven’t captured any staff on furlough come the end of the month you will not be able to add any and/or anyone new to the grant claim scheme from this date forward.
- From 1 July 2020, the scheme will be made more flexible to enable employers to bring back furloughed employees part-time. It will allow employers to still claim some grant funding towards the time the employees remain on furlough.
- From 1 August 2020, employers will need to start contributing to the wage costs of their furloughed staff. This will then be a gradual increase throughout September & October 2020 will the scheme planning to come to an end at the end of October 2020.
Closure to new entrants of the scheme – 30 June 2020
No new entrants are allowed on the furlough grant scheme as of 1 July 2020, the doors will be shut. Claims can only be made for those employees who have been captured on the furlough scheme before this date. It is important you get your claim for the month of June therefore, as this will impact on what you can claim going forward for the next quarter. Employers will have until 31st July to submit the claim for the month of June.
Part-time furloughing – 1 July 2020
From the above date, businesses will have the flexibility to bring previously furloughed staff back to work part-time. This is in a bid to help re-start businesses. The government will continue to pay 80% of their wages for the time they are on furlough to cover them and their normal hours of work. This will continue up until the end of August 2020.
The hours and work patterns must be agreed by employer and employee to cover one-week periods as a minimum at a time and in writing. Detailed records are to be kept as part of statutory duties and to support claims should you need them for any future possible HMRC enquiry. You will need to reclaim it.
If employees are unable to return to work and/or employers do not have work for them they can remain on furlough through to the end of August.
Employers to start to contribute to wage costs – 1st August 2020
From 1st August 2020, the government will support the 80% of wage costs up to £2,500 AND employers will need to pay the pension contributions and the Employer’s National Insurance Contributions.
From 1 September 2020, the government will pay 70% of wage costs up to £2,187.50 for the hours NOT worked AND employers will need to pay the 10% of the furlough pay to make up to the 80% for the hours not worked, the pension contributions and the Employer’s National Insurance Contributions.
From 1 October 2020, the government will pay 60% of the wage costs up to £1,875 for the hours NOT worked AND employers will need to pay the 20% of the furlough pay to make up to the 80% for the hours not worked, the pension contributions and the Employer’s National Insurance Contributions.
- The cap on the furlough grant claim will be proportional to the hours not worked.
Many smaller employers will be taking the benefit of the £4,000 state aid support towards Employer’s National Insurance Contributions and so many will not suffer here throughout most of this quarter.
Given the fast-paced nature of the pandemic, we are currently experiencing it is always better to keep checking to HMRC’s website https://www.gov.uk/government/publications/changes-to-the-coronavirus-job-retention-scheme
They have improved their calculator to assist with the changes and in a bid to help make the claiming as accurate and smooth as possible.
HMRC are fast-tracking legislation to enable them to claim back wrongful and overpaid claims, so it is important more than ever to ensure your calculations are correct and that claims aren’t going in wrong. We are hearing that their whistleblowing line has been hot and over 2,000 + businesses have been reported from wrongful claims. These will be first in their firing line I’m sure to trigger enquiries.
At Sence, rest assured if we do your payroll on your behalf all our claims are correct and accurate and based on the information given to us by you. We keep detailed records that will support all claims made on your behalf.
If you need further guidance please get in touch with the team – drop us an email or call 01530 447999