What the Furlough?
Just when we start to understand The Coronavirus Job Retention Scheme, it goes and changes again! Never a dull moment in the world of HMRC. Changes were initially anticipated to start August 1st, but this was brought forward to July 1st to ease the introduction of furloughed teams back into the workplace.
So! what are all these changes? Well, as always the devil is in the detail, and this won’t be available until 12 June, but what we do know is:-
From 1 July, please meet the ‘Flexible Furloughing scheme’ allowing employers to bring furloughed employees back into work for *any amount of time/shift pattern and continue to claim the CJRS grant for any ‘normal’ hours not worked (furloughed hours).
*Claims for furloughed hours must be for a minimum period of a week.
*Employers will be responsible for paying the wages for the time in work
The scheme will CLOSE to new entrants from 30 June.
From 1st July, employers can ONLY furlough employees who had previously been furloughed already, for a full 3-week period prior to June 30th.
So, the final date employers can furlough an employee for the very first time will be 10 June, to ensure 3 weeks furlough by end June.
Employers have until July 31st to make any claims in respect of the period to 30th June.
The scheme will close end of October, any extension is looking extremely unlikely.
When making a claim, employers will be required to submit data on the usual hours an employee would usually be expected to work in a claim period and actual hours worked.
From August 2020, the level of grant provided through the scheme will be slowly tapered, however individuals will continue to receive 80% of their salary (capped at £2.5k) covering the time they are unable to work. Here’s the timeline….
June and July: The government pays 80% of wages up to a cap of £2,500 also Employer National Insurance contributions (ER NICS) and pension contributions. Employers are not required to pay anything*
*unless furloughed employees work flexibly from July 1st, in which case the employer will need to pay full pay for those hours worked
August: The government continues to pay 80% of wages up to a cap of £2,500. In August it’s the employers turn to cover the ER NICs and pension contributions.
September: The government reduces their contribution to pay 70% of wages up to a cap of £2,187.50. As in August, Employers will pay ER NICs and pension contributions and also 10% of wages to make up 80% total up to a cap of £2,500.
October: The government further reduces their contribution, this month they will pay 60% of wages up to a cap of £1,875. Employers cover ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.
Finally, make sure employees fully understand how their pay is calculated. Employees who believe they aren’t getting their 80% share can report any concerns to the HMRC fraud hotline. HMRC have said that they will investigate and won't hesitate to take action against those found to be abusing the scheme.
So that’s it in a nutshell! Let’s see what the detailed guidance says on 12 June. Watch this space....
If you have any questions on any of the above, or would like further advice on the practical and cultural aspects of furloughing employees, please speak to us and we’ll be more than happy to help. email: Wendy@hrconnected.co.uk
This article was written and released on 4th June, please be aware of any subsequent government updates
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