What's New on the Coronavirus Job Retention Scheme?
1 July 2020
About the Job Retention Scheme
On Friday 20 March 2020, Chancellor Rishi Sunak set out a package of temporary measures to support UK businesses through this period of disruption caused by the Coronavirus outbreak. One of those packages announced was the Job Retention Scheme. Initially running until the end of May and then June. On 12 May 2020, the Chancellor extended the scheme for until the end of October, with claims backdated to 1 March 2020.
On Friday 29 May 2020, the Chancellor set out more details on how the Coronavirus Job Retention Scheme will continue to support jobs and businesses as people return to work.
This included detail of new flexibilities allowing employees to work part time while still being eligible for furlough grants, and the introduction of employer contributions.
The current scheme ends on 30 June 2020 and the new scheme opens on 1 July 2020.
Who is Eligible
There is no requirement for an employee to be on furlough on 30 June to be eligible, as they could have been furloughed previously but later brought back to work.
The scheme closes to new entrants on 30 June. This means that employees must have been furloughed (for whom employers have successfully claimed a grant) on or before the 10 June if they are to be furloughed on or after 1 July. This will apply to anyone who has been on furlough for at least three consecutive weeks between 1 March and 30 June 2020.
Note the requirement to have previously been furloughed does not apply to any employee returning from statutory parental leave after 10 June 2020 (including maternity, paternity, shared parental, adoption or parental bereavement leave).
Furlough claims for periods up to and including 30 June must be made by 31 July.
New guidance confirms that, although employees must agree to be furloughed, agreement can only be confirmed in writing and employees do not need to provide a written response.
Details of the New Scheme
The new scheme allows employees to work part-time while being furloughed for hours not worked. Employers are responsible for the cost in full for any hours worked by furloughed employees and can claim a furlough grant to cover the balance between hours worked and the employee’s “usual hours”.
It will continue to be possible to fully furlough employees or to rotate employees on and off furlough. If employees are fully furloughed, they are still not able to do any work for their employer.
From 1 July, the minimum three-week period for furlough has been removed and there is no minimum period.
Making a Claim
From 1 July any HMRC claim submitted to CJRS portal should be referring to a minimum one-week period. An exception is when the period claimed for includes either the first or last day of the calendar month, and an employer is claiming for the period ending immediately before it. In these cases, the claim can be for fewer than seven days.
Employers can only make one claim for any period, so they must include all furloughed or flexibly furloughed employees in one claim, even if they are paid at different times. Overlapping claims are not going to be accepted.
When an employer wishes to flexibly furlough employees, for every claim period they will need to work out and submit for each employee:
» the employee’s usual working hours (for employees on variable hours, usual hours are based on the higher of the average number of hours worked in the tax year 2019 to 2020, or the corresponding calendar period in the tax year 2019 to 2020,
including periods of paid annual leave or non-discretionary overtime);
» the actual hours they work; and
» their furloughed hours
From 1 July 2020 the number of employees an employer can claim for in any claim period cannot exceed the maximum number of employees on furlough at the same time in any period prior to 30 June. The exception to this cap is in relation to employees returning from statutory parental leave. This restriction is likely to create issues for businesses who previously rotated employees on and off furlough, but who might now wish to have everyone working part time.
From 1 August, employers will need to start contributing to the employee’s wage costs and employers will no longer be able to claim Employer’s NI or Pension contributions.
From 1 September employers will only be able to claim 70% of normal pay but will have to pay employees 80%, funding the extra 10% themselves.
From 1 October employers will only be able to claim 60% of normal pay but will have to pay employees 80%, funding the extra 20% themselves.
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