COVID-19
Knowledgebase

Duncan & Toplis is here to help and support you through the ongoing challenges presented by the coronavirus pandemic. Whilst this is an anxious time for many, it’s important to know that there is help available.

We are summarising the measures, including eligibility requirements, as they are announced and all details can be found here in our COVID-19 Knowledgebase.

Coronavirus Job Retention Scheme

Updated 09.07.2020: On Friday 29 May 2020 the Chancellor announced more detail on the planned changes to the Coronavirus Job Retention Scheme (CJRS). These changes have been put in place to allow for more flexibility within the scheme.

Employers can now bring previously furloughed employees back to work on reduced part time hours whilst still being able to utilise the furlough scheme. This is to help businesses make their transition back from the effects of the pandemic.

Below we have outlined the information you need to know against key dates, our detailed guidance note is available to download here. Please note that employers have until 31 July to make any claims in respect of the period to 30 June.

1 June 2020

CJRS continues unchanged the operation of furlough leave and grant claims.

10 June 2020

This is the last possible date available for an employer to place an employee on furlough leave who has not been previously. This is to ensure that they have the minimum three-week furlough period prior to the 30 June.

30 June 2020

The CJRS closes to new entrants. From this date, employers will only be able to place employees on furlough leave or use the furlough scheme for employees who have previously had a period of furlough leave for a minimum of three weeks prior to this date.

1 July 2020

Employers will now be able to bring previously furloughed employees back to work on a part time basis if the business has a requirement for some work to be undertaken but is not able to provide the normal full contractual hours. This means that the employees can come back to work part time and still have the remaining time not worked as furlough leave. If the employer is not able to provide any work the employee can remain on furlough leave.

When asking employees to work reduced hours there is no limit on the hours that are allowed to be worked but the arrangements need to cover a minimum period of one week and must be agreed with that employee and confirmed in writing.

The employer will be required to pay the employee for the hours that have been worked based on their usual contractual pay rate, not furlough leave rate.  The employer will also need to pay that employee their furlough leave pay based on 80% of the contractual hours that they have not worked capped at £2,500 which they can still reclaim from HM Revenue & Customs (HMRC).

The employee should not receive any less than 80% of their normal pay capped at £2,500 a month.

In terms of which costs the employer can reclaim, the government will provide the employer with a grant to cover furlough leave pay up to 80% capped at £2,500 a month, for the contractual hours that were not worked by the employee. It is likely that the cap will be proportional to the hours not worked. Further guidance on the calculations will be provided by the 12 June by HMRC.

In addition, the government will continue to pay the employer NI and minimum pension contribution (through the CJRS) for the hours that are not worked.

1 August 2020

Employers continue to have flexibility on hours worked by employees and will continue to pay the employee for the hours that have not been worked. 

The employer will pay the employee for the hours that have been worked based on their usual contractual pay rate, not furlough leave rate. For the hours not worked by the employee, the employer will also pay furlough pay based on 80% of the contractual hours not worked, capped at £2,500.

The employee should not receive any less than 80% of their normal pay, capped at £2,500 a month.

When making a claim for August, the employer will not be able to reclaim employer NICs and the minimum pension contribution for furlough hours that were not worked.

For smaller employers, the employer NICs can be covered by the Employment Allowance.

1 September 2020

The government reduces the amount that they pay under the furlough scheme to 70% of salary, capped at £2,187.50 a month.

The employer will continue to pay the employee for the hours that have been worked based on their usual contractual pay rate, not furlough leave rate. The employer will also pay that employee their furlough pay based on 80% of the contractual hours that they have not worked, capped at £2,500.  

The employee should not receive any less than 80% of their normal pay capped at £2,500 a month.

In relation to which costs the employer can reclaim, the government will provide the employer with a grant to cover furlough pay up to 70%, capped at £2,187.50 a month, for the contractual hours that were not worked by the employee. It is likely that the cap will be proportional to the hours not worked. Further guidance on the calculations will be provided by the 12 June by HMRC.

This means that the employer is now required to top up the employee’s furlough pay by 10%.

As with August, the employer will not be able to claim for the employer NICs and minimum pension contribution for the furlough hours that were not worked. 

1 October 2020

The government reduces the amount that they pay under the furlough scheme to 60% of wages, capped at £1,875 a month. 

The employer will continue to pay the employee for the hours that have been worked based on their usual contractual pay rate, not furlough leave rate. The employer will also pay that employee their furlough pay based on 80% of the contractual hours that they have not worked, capped at £2,500.  

The employee should not receive any less than 80% of their normal pay capped at £2,500 a month.

With regards to which costs the employer can reclaim, the government will provide the employer with a grant to cover furlough pay up to 60%, capped at £1,875.00 a month, for the contractual hours that were not worked by the employee. It is likely that the cap will be proportional to the hours not worked. Further guidance on the calculations will be provided by the 12 June by HMRC.

This means that the employer is now required to top up the employee’s furlough pay by 20%.

The employer continued to not be able to claim for the employer NICs and minimum pension contribution for the furlough hours that were not worked. 

31 October 2020

The scheme ends.

31 January 2021

The job retention scheme bonus; announced in the summer statement, the Chancellor declared that there would be a one-off £1,000 payment made to employers for every furloughed employee retained to the end of January 2021.

This is a UK-wide initiative and applies to all workers earning over £520 per month.

 

How is the calculation being made?

The government will release guidance on the specific instructions around calculation of furlough where an employee is working and on furlough leave at the same time. It is clear however that whilst the government will continue to pay furlough claims, the furlough cap (£2,500, £2,187.50 and £1,875) will be proportional to the hours not worked. 

HMRC is consulting on recovery powers for CJRS

Under proposed amendments to the Finance Bill, HMRC will be able to recover grants issued for the Coronavirus Job Retention Scheme (CJRS) and Self-employed Income Support Scheme (SEISS), issue penalties and charge tax. Penalties will only be levied in cases of deliberate non-compliance.   

Full details of the consultation can be found on the government’s website here

Click here to view CJRS and 'flexible furlough' FAQ

 

If you have any questions or queries that have not been answered above, please contact your usual account manager or submit an enquiry to our team here.

Please note, we are only able to offer advice and guidance from a business perspective and are therefore unable to answer any personal enquiries from individual employees

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