The Coronavirus Job Retention Scheme Update
Coronavirus Job Retention Scheme: a cash grant that is designed to allow employers to retain staff who would otherwise be laid off.
HMRC Full Update
CJRS Key Dates
At a glance -
- Employers may claim and pay a grant to their employees instead of making them redundant, due to the adverse effects of the coronavirus.
The grant consists of:
- up to 80% of the salaries of employees, subject to a cap of £2,500 per month for
- the period March to August 2020.
- up to 70% of salaries subject to a cap of £2,187.50 for September 2020.
- up to 60% of salaries subject to a cap of £1,875 for October 2020.
- The scheme initially ran for four months starting from 1 March 2020. On 12 May it was extended to the end of October. On 29 May, new changes were announced which allow for part-time working for furloughed workers and a tapered form of employer contribution to the scheme.
- Only employees on the PAYE payroll as at 19 March 2020 and for whom a payment was notified to HMRC on a Real-Time Information (RTI) submission on or before 19 March, (prior to 15/04/2020 this date was 28 February 2020), can be furloughed.
- The scheme closes to new entrants on 30 June 2020 making 10 June the last date to furlough someone for the first time.
- Employers must designate affected employees as ‘furloughed workers’ and notify the employees of this change.
- Between March and June 2020, workers cannot undertake work while furloughed, they may undertake training.
- From July 2020, employees may undertake part-time work for their employers and the employer may claim a grant for time not worked.
- Between March and June 2020, each furlough period must last for at least three consecutive weeks. The minimum claim period is reduced to 1 week from July 2020.
- Claims for periods ending on or before 30 June 2020 must be made by 31 July 2020.
How to claim -
- Employers submit information to HMRC about the employees that have been furloughed and their earnings through an online portal.
- The portal went live on 20 April.
- Claims can be made every three weeks with payments expected within six working days of making a claim. The minimum claim period reduces to 1 week from 1 July.
- HMRC has created a step by step guide to making claims.
Key points -
- Employers pay employees for the hours they work: government funding is only given for non-working (furloughed) employees.
- As with the previous version of the CJRS employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
- Previously furloughed employees may commence part-time work their employers from 1 July. Employers can claim the grant for the hours their employees are not working calculated by reference to their usual hours worked in a claim period.
- Further details will be included in future guidance from the government.
- From 1 July, claim periods will no longer be able to overlap months, employers who previously submitted claims with periods that overlapped calendar months will no longer be able to do this going forward.
- The minimum claim period will reduce to 1 week from 1 July. This gives employers total flexibility over work rotas: all details must be agreed in writing with the employee.
- 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.
Scheme closure to new entrants -
- 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 three-week period prior to 30 June. The exception to this is employees who have been on statutory parental leave such as maternity or paternity leave.
- This means that the final date by which an employer can furlough an employee for the first time will be the 10 June, in order for the current three-week furlough period to be completed by 30 June.
- Employers will have until 31st July to make any claims in respect of the period to 30 June.
- From 1 July the scheme will only be available to employers that have previously used the scheme in respect of employees they have previously furloughed.
- From 1 July, claim periods will no longer be able to overlap months, employers who previously submitted claims with periods that overlapped calendar months will no longer be able to do this going forward. This is necessary to reflect the forthcoming changes to the scheme.
- The number of employees an employer can claim for in any claim period cannot exceed the maximum number they have claimed for under any previous claim under the current CJRS.
- Employers can continue to make claims in anticipation of an imminent payroll run, at the point payroll is run or after payroll has been run.
- Employers will be able to make their first claim under the new part-time work scheme from 1 July.
UPDATE 18 June 2020: PAYE and NIC payments -
We understand that it is a condition of the scheme that, having paid furloughed staff, employers must pay all PAYE and NIC over to HMRC or their claims may be refused. This condition is not immediately clear when making a claim under the scheme so, if HMRC are refusing furlough claims due to unpaid PAYE and NIC, businesses should contact HMRC to discuss their position and see if HMRC will agree to retaining the overdue PAYE/NIC from future CJRS payments to help them get up to date, and allow them to continue receiving support under CJRS. This does not apply to general employer tax arrears, only to overdue PAYE and NIC in respect of payments to furloughed employees.
UPDATE 12 May 2020: Extension of scheme and proposed relaxation of rules -
The scheme is to be extended by a further four months to the end of October 2020.
A relaxation in the rules is planned to allow furloughed workers to work part-time. From this date also the employer will need to make a contribution towards furloughed workers’ wage costs. More details are expected on this by the end of May. The scheme will continue in its current form until the end of July.