Extension of the Coronavirus Job Retention Scheme
On the 1st of March the UK government released the Coronavirus Job Retention Scheme (CJRS) and this was when we all learnt the word “furlough” for the first time, a word that has now become a household term. Many employers around the country have made use of the scheme as a way to alleviate the high costs of wages during these uncertain economic times and to do everything they can to avoid making staff redundant, a decision no employer ever wants to make. The government’s priority with the CJRS has been to support people, protect jobs, livelihoods and businesses throughout the crisis and in June, there were around 9.1 million jobs furloughed (UK Number of People on Furlough 2020, Statista).
The scheme has now been extended again, but with some important changes this time. In an effort to help people start returning to work, the government has now introduced “flexible furloughing”. While before there was a strict policy that a person must be furloughed for a minimum of three weeks, from the 1st July employers can start to bring back furloughed employees on a part time basis and can claim through the CJRS for any standard hours not worked. Employers can still choose to fully furlough throughout this time.
These are not the only changes on the horizon, so we have summarized some points below and also include a key dates infographic provided by HM Revenue and Customs (HMRC).
If you are responsible for payroll within a business we highly recommend attending one of the many webinars HMRC are hosting on the subject. They are very informative and give pay calculation examples for what will be quite complex payroll calculations.
- The CJRS will close to any new entrants from 30th June and from the 1st July employers will only be able to furlough someone who has been placed on their three weeks of furlough before 10th June
- On the 31st July employers will need to ensure they have submitted a claim for any staff furloughed before 30th June
- Throughout June and July HMRC will continue to cover 80% of wages (up to £2,500 per month) and the associated Employer’s NI and pension contributions
- From 1st August HMRC will no longer contribute to Employer’s NI and pension contributions
- From 1st September employers will only be able to claim for 70% of their staff wages or up to £2,187.50 per month
- From the 1st October employers will only be able to claim for 60% of staff wages or up to £1,875 per month
The rules remain the same when a staff member is on furlough and they cannot complete any revenue generating work for the business during their furlough time, but can still undertake training and development.
With future audits being an inevitability, it will be imperative to keep accurate records and employers will need to retain employment agreements, records of hours worked and not worked, payroll calculations and claim reference numbers for six years. If an employer has made a mistake and overclaimed we highly recommend contacting HMRC to advise them of the error. Employers will need to pay any overclaimed money back to the government, which of course will not be easy if the money has already been paid to an employee.
Overall the CJRS has been a very welcome support scheme from the government and so far has ensured that many people can retain their jobs and employers can retain their staff members. At Australasian Recruitment Company we are hoping, along with the rest of the UK, for the market to bounce back again and perhaps flexible furloughing will be the catalyst for this.
Take care, stay safe and stay positive!
Australasian Recruitment Company
We are open for business and here for you when you need us so give us a call on 020 7625 3300. We are also pipelining candidates to be ready for when the market turns and you can submit your CV here.