On 1 June we outlined proposed changes to the Coronavirus Job Retention scheme. A significant volume of further guidance has now been issued and the following is only a summary, touching on some of the key points and does not go into detail on every matter. In particular, the guidance includes examples of how to calculate employee wages and claims in a number of different circumstances but we have not gone into detail in this update and have included a link to the guidance. We can of course discuss particular matters as required.
Firstly, we’ll look at claims to 30 June.
Claims to 30 June 2020
- The last day an employee could have started furlough for the first time was 10 June 2020. *1
- There is no maximum length for claim periods that end on or before 30 June. However, claims for any periods starting before 1 July must end on or before 30 June. This is the case even where an employee furloughed in June continues to be furloughed full time in July. Separate claims will need to be submitted to cover the days in June and the days in July that you want to claim for, even if employees are furloughed continuously.
- You may be in a situation where you have brought an employee back from furlough but then need to furlough them again. The new furlough period must be for a minimum of 3 consecutive weeks. This is the case even where the 3 consecutive week minimum period ends after 1 July.
For example, a previously furloughed employee can start a new furlough period on 22 June which would have to continue for at least 3 consecutive weeks ending on or after 12 July. After this the employee can then be flexibly furloughed for any period. However, you would need to make a separate claim for the period up to 30 June.
- Please note, claims for periods ending on or before 30 June must be made by 31 July 2020.
*1 However, this does not apply to an employee who has returned from maternity, shared parental, adoption, paternity or parental bereavement leave after 10 June.
From 1 July 2020
The scheme changes from 1 July 2020. The following are some key points:
From 1 July:
- Only employees that you have successfully claimed a previous Coronavirus Job Retention Scheme grant for will be eligible for further grants under the scheme. This means they must have previously been furloughed for at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June 2020.
- You will be able to flexibly furlough employees – this means you can bring your employees back to work for any amount of time and any work pattern.
- You will still be able to claim the furlough grant for the hours your flexibly furloughed employees do not work, compared to the hours they would normally have worked in that period.
- There is no minimum period of furlough.
- Claims must start and end in the same calendar month because the rules change from the beginning of each month.
- A claim must cover at least 7 days unless you’re claiming for the first few days or the last few days in a month. You can only claim for a period of fewer than 7 days if the period you are claiming for includes either the first or last day of the calendar month, and you have already claimed for the period ending immediately before it.
Please note the following:
- The number of employees you can claim for in any claim period starting from 1 July 2020 cannot exceed the maximum number of employees you claimed for under any claim period ending by 30 June 2020. *2
For example, if you had previously submitted three claims between 1 March 2020 and 30 June, in which the total number of employees furloughed in each respective claim was 5, 10 and 15 employees. The maximum number of employees that you could furlough in any single claim starting on or after 1 July would be 15.
This could be an issue for anyone who has operated a ‘team A/team B’ system, or anyone who has rotated staff on furlough.
- When claiming for employees who are flexibly furloughed you should not claim until you are sure of the exact number of hours they will have worked during the claim period. This means that you should claim when you have certainty about the number of hours your employees are working during the claim period. If you claim in advance and your employee works for more hours than expected, then you will have to pay some of the grant back to HMRC.
You may need to give more consideration to the timing of claims.
*2 The number of employees you are furloughing for the first time due to them returning from parental leave can also be added to any previous maximum.
Amount of Grant
The grant available continues throughout July as before.
From August, the government grant provided through the job retention scheme will be slowly tapered.
- in August, the government will continue to pay 80% of wages up to a cap of £2,500. Employers will pay Employer NICs and pension contributions.
- in September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work. Employers will have to pay 10% of wages to make up 80% of the total up to a cap of £2,500. Employers will also have to pay Employer NICs and pension contributions.
- in October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work. Employers will have to pay 20% of wages to make up 80% of the total up to a cap of £2,500. Employers will also have to pay Employer NICs and pension contributions.
The scheme will close on 31 October 2020.
We will continue to provide updates and information. However, in the meantime we hope you will find the above useful but please do contact me if you have any questions.
James Andrews – [email protected]
Links to the government guidance: