As of August 2020, employers are now responsible for paying employer National Insurance and pension contributions for the hours the employee does not work. Plus, read about the Job Retention Bonus scheme.
The Coronavirus Job Retention Scheme (CJRS) is changing.
As of 1st July 2020, employers can bring back to work employees that have previously been furloughed. Employers are still able to claim a grant for their normal hours not worked, but are now responsible for paying their wages for the hours they do work. Employees can return to work for any amount of time and on any shift pattern.
As of August 2020, employers are now responsible for paying employer National Insurance and pension contributions for the hours the employee does not work. The government will pay 80% of wages up to a cap of £2,500.
From September 2020, 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 pay employer National Insurance and pension contributions and 10% of wages to make up 80% total wages, up to a cap of £2,500.
From October 2020, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work. Employers will pay employer National Insurance and pension contributions and 20% of wages to make up 80% total wages, up to a cap of £2,500.
The Job Retention Scheme will close on 31st October 2020.
Job Retention Bonus
Details have been released about how the Job Retention Bonus will work:
- employers will be able to claim a one-off payment of £1,000 for every employee they have previously received a grant for under the Coronavirus Job Retention Scheme (CJRS), and who remains continuously employed through to the end of January 2021.
- to be eligible, the employee must have received earnings in November 2020, December 2020 and January 2021, and must have been paid an average of at least £520 per month, and a total of at least £1,560 across the three months.
- employers will be able to claim the bonus after they have filed PAYE information for January 2021, and the bonus will be paid from February 2021. More detailed guidance, including how you can claim the bonus online, will be available by the end of September.
- those who were furloughed and had a claim submitted for them after the 10th June (when the Job Retention Scheme closed to new entrants), because they were returning from paternal leave or time serving as a military reservist will also be eligible for the bonus as long as they meet the other eligibility criteria
- employers will also be eligible for employee transfers protected under TUPE legislation, provided they have been continuously employed and meet the other eligibility criteria and the new employer has also submitted a Job Retention Scheme claim for that employee
What you need to do now
If you intend to claim the Job Retention Bonus you must:
- ensure all your employee records are up to date
- accurately report employees’ details and wages on the Full Payment Submission (FPS) through the Real Time Information (RTI) reporting system
- make sure all of your CJRS claims have been accurately submitted and you have told HMRC about any changes needed (for example if you’ve received too much or too little)
Further details on the Job Retention Scheme
Workers on maternity or paternity leave - People on maternity and paternity leave who return to work in the coming months will be eligible for the government’s furlough scheme, but criteria applies. This also applies to people on adoption leave, shared parental leave, and parental bereavement leave. Read more information on this here.
The scheme closed to new entrants on 30th June. Unless you’re making a new claim for an employee who is a military reservist or is returning from statutory parental leave, you can only continue to claim through the scheme if you have previously furloughed the employee for three consecutive weeks between 1st March and 30th Juneyou submitted your claim before 31st July.
The final date by which an employer could furlough an employee for the first time was 10th June, in order for the three week furlough period to be completed by 30th June. Employers had until 31st July to make any claims in respect of the period to 30th June.
How is the Job Retention Scheme changing over time?
The scheme updates mean that the following will apply for the period people are furloughed:
- June and July: The government will pay 80% of wages up to a cap of £2,500, as well as employer National Insurance and pension contributions. Employers are not required to pay anything.
- August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay employer National Insurance and pension contributions.
- September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay employer National Insurance and pension contributions and 10% of wages to make up the 80% total, up to a cap of £2,500.
- October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay employer National Insurance and pension contributions and 20% of wages to make up the 80% total, up to a cap of £2,500.
Check your eligibility
Find out if you’re eligible and how much you can claim to cover wages for employees on furlough due to COVID-19.
Work out 80% of your employees' wages to claim through the Coronavirus Job Retention Scheme
Find out how to calculate 80% of your employees' wages, National Insurance Contributions and pension contributions if you've furloughed staff due to COVID-19.
How to make a claim
To make a claim, you will need:
- to be registered for PAYE online
- the Government Gateway user ID and password you got when you registered for PAYE online
- your UK bank account number and sort code (only provide bank account details where a BACS payment can be accepted)
- the billing address on your bank account (this is the address on your bank statements)
- your employer PAYE scheme reference number
- the number of employees being furloughed
- each employee’s National Insurance number (you will need to search for their number if you do not have it, or contact HMRC if your employee does not have a number)
- each employee’s payroll or employee number (optional)
- the start date and end date of the claim
- the full amounts that you’re claiming for including:
- employee wages
- employer National Insurance contributions
- employer minimum pension contributions
- your phone number
- a contact name
You also need to provide either:
- your name (or the employer’s name if you’re an agent)
- your Corporation Tax unique taxpayer reference
- your Self Assessment unique taxpayer reference
- your company registration number
After you’ve claimed
Once you’ve claimed, you’ll get a claim reference number. HMRC will then check that your claim is correct and pay the claim amount by BACS into your bank account within 6 working days.
Payments received through the scheme must be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes.
Step-by-step guide to the scheme
HMRC has produced a step-by-step guide which explains the information that employers need to provide to HMRC to make a claim through the Coronavirus Job Retention Scheme (CJRS).
Regarding the extension to the Job Retention Scheme, James Simpson, head of employment at Blaser Mills Law, said: “The Chancellor’s announcement that the furlough scheme is to be extended until the end of October will be welcome news to businesses and employees across the country as they try to get back on their feet.
“The rules will allow for furloughed employees to be brought back part-time. This flexible approach will aid employers in implementing a gradual return to work for employees.
“Employers will still need to ensure the working environment is safe and measures are in place to limit the risk of infection. Employers should follow the new ‘COVID-19 secure’ guidelines published on the government website to help them get their businesses back up and running and workplaces operating safely. They include carrying out COVID-19 risk assessments, maintaining social distancing where possible and reinforcing cleaning processes.
“Employers should also take a flexible approach to working patterns, staggering shifts as necessary and adjusting start and finish times to help staff avoid rush hours and the number of people they come into contact with.”
Stay informed of the latest business support re: COVID-19
Remember to visit our COVID-19 business support hub for the latest support and information from the government, business support organisations and other avenues of support. Bookmark www.bbf.uk.com/covid-19 so you can easily find it in the future.