*Updated 8 June 2020*
Chancellor Rishi Sunak has recently announced further updates to the Coronavirus Job Retention (CJR) scheme. Below is the information you need to know:
The current CJR scheme will end on the 30th of June 2020 and is being replaced by a Phase 2 version of the scheme from the 1st of July 2020. The phase 2 scheme will end on the 31st of October 2020.
The only individuals who will meet the criteria for the Phase 2 scheme are employees who have been furloughed for a minimum of three weeks since the original scheme opened in March 2020. If you have employees who have not been on furlough and therefore a claim hasn’t been submitted, then the employee must have completed their first three week furlough period by the 30th of June 2020 to meet the criteria for furlough in the phase 2 scheme.
Employers who have not yet claimed through the scheme must make a claim prior to the 30th of June to be eligible for future claims.
Employers have until the 31st of July to make a claim for any periods up to the 30th of June.
From 1st July, claim periods can no longer overlap calendar months, due to changes to the scheme.
Employers can not increase the number of employees being claimed for from the 1st of July. Any claim being submitted must be equal to or less than any previous claim submitted for a claim period up to the 30th of June.
The phase 2 scheme allows for “Flexible Furloughing”. This means that employers can bring back employees to work and will be able to claim the furlough grant for the hours not worked. Employers can decide upon the days and hours worked to meet business needs but this this will need to be communicated with the employee and agreed in writing.
Employees will still receive 80% of their normal wages whilst on furlough. This rate will remain in place for the period of the furlough scheme to the 31st of October.
From the 1st of August. The financial support for businesses will be reduced when claiming for the furlough grant. This means that employers will require to contribute towards the wage costs for employees on furlough:
1st-30th August – Employers can claim the 80% gross furlough and will not be able to claim for the ER NIC and ER Pension Costs
1st - 30th of September – Employers can claim 70% of the gross furlough and will not be able to reclaim for the ER NIC and ER Pension Costs
1st - 31st of October - Employers can claim 60% of the gross furlough and will not be able to reclaim for the ER NIC and ER Pension Costs
From discussions with HMRC, they have advised that for any client who has taken advantage of the “Time to Pay Scheme” and have therefore deferred their PAYE payments for a period of time, if they have staff on furlough they must continue to pay over the PAYE/NIC payments in relation to the furloughed employees. We believe this information was not made clear at the time of discussing the time to pay scheme with HMRC and therefore request that businesses take action to either pay outstanding amounts due or alternatively discuss further with HMRC. Please contact your lead processor should you wish to discuss this further. HMRC have confirmed one of the conditions of the furlough grant is that all funds received by businesses must be used 100% in relation to paying the furlough employees and would therefore mean that the PAYE/NIC amounts should be paid as normal as the funds have been made available to employers.
On the 8th of June HMRC updated their Grant Claims portal to include a section where employers can declare an overpayment of a grant. This allows employers to adjust their future claim to take into consideration any overpayments claimed in error in recent months.Further guidance in relation to this scheme is to be communication by the UK Government on the 12th of June 2020.
By Katy Christiansen, Director, Payroll & Employment Taxes