Important changes to the Coronavirus Job Retention Scheme (CJRS)
POSTED ON: Tuesday, June 2nd, 2020
On 29 May 2020, The Chancellor outlined further details on the extension of CJRS, including improved flexibility to bring furloughed employees back part time in July, and a new taper requiring employers to contribute to furloughed salaries from August.
From 1 July 2020, businesses will be given the flexibility to bring furloughed employees back part time. Individual firms will decide the hours and shift patterns their employees will work on their return and will be responsible for paying their wages while in work.
From August 2020, the level of government grant provided through CJRS will be slowly tapered to reflect that people will be returning to work. That means that for June and July the government will continue to pay 80% of people’s salaries. In the following months, businesses will be asked to contribute, but crucially individuals will continue to receive that 80% of salary covering the time they are unable to work.
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The scheme updates mean that the following will apply for the period people are furloughed:
- 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.
- August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions.
- September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
- October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.
- Employers 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.
- Many smaller employers have some or all of their employer NIC bills covered by the Employment Allowance so will not be significantly impacted.
- Claims from July onwards will be restricted to employers currently using the scheme and previously furloughed employees. The scheme will close to new entrants on 30 June, with the last three-week furloughs before that point commencing on 10 June.
Here is more detail about the Government’s support for businesses and employees (including worked examples).
If you need any help with your claim please do not hesitate to contact us to speak to your local Pro-actions Business Coach.
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