The government announced the Coronavirus Job Retention Scheme to help businesses to continue paying employees that otherwise may have been laid off. Under this scheme, businesses can access grants of 80% of their employees’ wages up to a total of £2,500 per month per furloughed employee plus any employers’ national insurance costs and minimum autoenrollment pension contributions.
In order to access this scheme, businesses need to designate their workers as ‘furloughed employees’. A furloughed employee is an employee that remains on the payroll but is not working due to the coronavirus outbreak.
This scheme has been extended to 31st October 2020, with important changes announced by the chancellor on 29th May. The changes see the introduction of ‘flexible furloughing’. This could see your employees return to work a few days a week and continue to be furloughed for the remainder of the week, this could be useful for contractors who may be offered a tapered return to the office.
June – The CJRS will continue as it is, however, the scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full 3-week period prior to 30 June. This means you must furlough yourself or any eligible employees by 10th June 2020 to make a claim under the CJRS. Employers will have until 31 July to make any claims in respect of the period to 30 June.
July – The introduction of ‘flexible furloughing’ from 1st July means employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim CJRS grant for their normal hours not worked. The scheme is now closed to new entrants. The grant available remains at 80% of the furloughed workers wages up to £2,500 per month plus any employer’s national insurance costs and minimum autoenrollment pension contribution, for the time not worked.
August – The grant available will remain at 80% of the wage costs of the furloughed employee up to a maximum of £2,500 per month, however, the employer will no longer be able to reclaim the cost of any Employers NI and auto-enrolment pension costs.
September – The grant available will fall to 70% of the wage costs of the furloughed employee up to a cap of £2,190 the employer must contribute 10% up to a cap of £2,500 and cover the cost of Employers NI and auto-enrolment pension costs.
October – the grant available will fall to 60% of the wage costs of the furloughed employee up to a cap of £1,875, the employer must contribute 20% of wages up to a cap of £2,500, and cover the cost of Employers NI and auto-enrolment pension costs.
Can I claim this?
In order to access this scheme, businesses need to designate their workers as ‘furloughed employees’. If you have employees that are unable to work due to the coronavirus, you may be eligible to make a claim as outlined above. When employers are making decisions in relation to the process, including who to offer furlough to, equality and discrimination laws will apply in the usual way. Employees hired or only on the payroll after 28th February 2020 will not be eligible for this temporary scheme.
How do I claim this?
HMRC are developing a new online portal to facilitate this and working on a way to reimburse these costs to business. There is no system in place at present, however the government have advised that the systems will be in place before the end of April to facilitate payment of grants. We will keep this page up to date with the latest developments.
The government has issued guidance for employers relating to the Coronavirus Job Retention Scheme, you can read this here.