Magee Gammon Employee Furlough and CJRS

Employee Furlough information and guidance

We fully understand the difficulties that you may be facing in these uncertain times and we want to assure you that our team are here to help. To find out how we can support you, please speak to one of our team today.

The information included on this page is our interpretation of what has been published at this time, this may change in the future as further information and clarity of the information already published becomes clearer. We will be updating this page regularly.

 


Updated – 07 September 2020

A reminder on the key dates for the Coronavirus Job Retention Scheme

As the Coronavirus Job Retention Scheme (CJRS) is slowly wound down by the Government, businesses must adapt their PAYE reporting and payroll function to reflect the required funding contributions.

To help, we have provided a list of key dates for September and the following months to ensure you are prepared for the changes ahead:

The closure of the CJRS is likely to have a significant impact on the employment costs of businesses and so it is important to plan for this now.

Businesses should also remain aware of the Job Retention Bonus, which offers employers £1,000 for every furloughed employee who is brought back, continuously employed and paid at least £520 a month on average from the end of October 2020 to 31 January 2021.

Link: Coronavirus Job Retention Scheme and Claim for wages through the Coronavirus Job Retention Scheme


Updated – 02 September 2020

 

The coronavirus Job Retention Scheme (CJRS) is changing

From 1 September, businesses that have put staff on furlough will have to pay 10% of their wages. This will rise to 20% the following month, before the scheme ends on 31 October.

The step by step guide for employers has been updated and can be seen here:

https://www.gov.uk/government/publications/coronavirus-job-retention-scheme-step-by-step-guide-for-employers?utm_source=8b21f2f9-507f-4ee6-ab3f-8b31380a33e9&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate


Updated – 01 September 2020

HM Revenue & Customs publishes Job Retention Bonus guidance

HM Revenue & Customs (HMRC) has published guidance setting out how the Job Retention Bonus will operate.

The Job Retention Bonus was announced by the Chancellor at the Summer Economic Update on 8 July 2020 and will provide employers with a one-off payment of £1,000 for each previously furloughed employee continuously employed to 31 January 2021.

Eligible employees who return from furlough under the Coronavirus Job Retention Scheme (CJRS) must be paid £520 a month on average between 1 November 2020 and 31 January 2021 and receive earnings during each of November, December and January.

Employers will be able to claim the payment after they have filed for PAYE in January 2021, with payments expected from February 2021 onwards.

HMRC says employers must ensure they have:

Additionally, employers must ensure their payroll and RTI records are up to date and must co-operate with HMRC requests for information about their CJRS claims.

Where HMRC considers that CJRS claims may have been fraudulent or inflated, payments will be withheld until the conclusion of any enquiry.

Detailed guidance on the earnings that count towards the £520 a month average minimum earning threshold is expected to be published in September 2020.

The new guidance also confirms that the payment will be taxable.

HMRC advises that employers wishing to claim the bonus should ensure that their employee records are up to date and that they are reporting employees’ details and wages on the Full Payment Submission (FPS) through RTI submissions.

Link: Job Retention Bonus


Penalties for breaches of furlough and self-employment scheme rules confirmed

HM Revenue & Customs (HMRC) has set out full details of the penalties that will apply to employers and self-employed individuals who are found to have breached the rules of the Coronavirus Job Retention Scheme (CJRS) and Self-Employment Income Support Scheme (SEISS).

A factsheet published by HMRC confirms that employers that have over claimed CJRS grants and have not made a repayment should notify HMRC by the latest of:

HMRC says that employers that were not aware they had been overpaid when they received the grant or when circumstances changed will not be charged a penalty. However, they will need to repay the amount overpaid.

Where HMRC finds that an employer has received an overpayment, it will carry out an assessment of an Income Tax charge to recover the overpayment. This will be equal to the amount overpaid, or not used within a reasonable period to make furlough payments to employees or to cover associated costs. The charge must be repaid within 30 days, after which interest and penalties will apply.

If an overpayment has been received, but HMRC has not made an assessment, employers must detail the overpayment on their Corporation Tax return or Self-Assessment tax return.

Where a company has received an overpayment and the company officers knew of an over claimed CJRS grant when it was received, or another time when a tax liability arose, or they were aware that the grant was not used for its intended purpose, and the repayment cannot be recovered from the company because of insolvency, company officers can be made personally liable for the amount owed.

If an employer fails to notify HMRC within the relevant period, a penalty of up to 100 per cent of the CJRS grant they received but were not entitled to and which they do not repay by the last day of the notification period, will be charged. This means employers could have to pay more than twice the amount of an overpayment in these circumstances.

Deliberate defaulters could also have their details published under the Publishing Details of Deliberate Defaulters (PDDD) policy.

Specific arrangements apply to partnerships. Partners will be held jointly and severally liable for the overpayment. If HMRC does not issue an assessment, one of the partners will need to include the charge on their 2020-21 Self-Assessment Tax Return.

Meanwhile, HMRC has published a separate factsheet detailing penalty arrangements for the SEISS.

Self-employed individuals in receipt of an overpayment or a grant they were not entitled to must notify HMRC by the later of:

As with CJRS overpayments, HMRC will issue tax assessments for overpayments that have not been repaid. These will need to be paid within 30 days to avoid interest and penalties being applied.

Self-employed individuals who are concerned about making a payment can contact HMRC’s Payment Support Service on 0300 200 3835.

Where an overpayment has been repaid, it does not need to be included on a 2020-21 Self-Assessment Tax Return. However, self-employed individuals who have received an overpayment but do not receive a tax assessment should include it on their 2020-21 Self-Assessment Tax Return.

If a self-employed individual does not notify HMRC of an overpayment within the notification period, they will be charged a penalty, based on the overpaid amount owing on the last day of the notification period.

Penalties will only apply to self-employed individuals who were not eligible for the grant and were unaware that this was the case if they do not repay the grant by 31 January 2022.

Furthermore, specific arrangements apply to partners and partnerships in receipt of overpayments or grants they were not entitled to, with partners held jointly and severally liable for overpayments or claims they were not eligible for that were subsequently paid into the partnership.

Where a self-employed individual or partner does not agree with HMRC’s assessment, it is open to them to appeal against the decision, through a process set out in the guidance.

Link: Self-Employment Income Support Scheme – receiving grants you were not entitled to

Link: Coronavirus Job Retention Scheme – Receiving grants you were not entitled to


Furloughed workers get redundancy pay protection

The Government has closed a loophole which allowed employers to make furloughed staff redundant on reduced pay under the furlough scheme.

The new law kicked in on 31 July 2020 to ensure furloughed workers who are made redundant receive redundancy pay based on their normal wage.

Employees who are made redundant after more than two years of continuous service are usually entitled to a statutory redundancy payment.

This payout is based on their length of service, age and pay, up to a statutory maximum.

Many of the UK’s 9.6 million furloughed workers are being paid at 80% of their normal wage.

The Government had urged employers to do right by their employees and pay those being made redundant based on their normal wage.

Redundancies have been tipped to rise as the furlough scheme winds down at the end of next month, and a minority of employers made redundancies using the reduced furlough rate.

But the Government acted quickly to close the loophole to ensure those eligible and affected receive statutory pay based on their normal wages.

Alok Sharma, business secretary, said:

“Where redundancies are unavoidable, it is important that employees receive the payments they are rightly entitled to.

“These new laws ensure furloughed workers are not short-changed if they are ever made redundant – providing some reassurance for workers and their families during this challenging time.”

The new law extends to statutory notice pay, which ensures workers are given a notice period before their employment ends.

In addition, basic awards for cases of unfair dismissal must be based on full pay rather than reduced wages through the furlough scheme.

Talk to us about termination payments.


Updated – 19th August 2020

CJRS Update

What you need to do from 1 September

Making sure your data is right

It is important that you provide all the data HMRC need to process your claim. Payment of your grant may be at risk or delayed if you submit a claim that is incomplete or incorrect, so we want to help you get this right. We have an accurate claim calculator so please talk to us if you need any help.

See: https://content.govdelivery.com/accounts/UKHMRCED/bulletins/29a88c0


Find out which employees you can put through furlough and claim for through the coronavirus job retention scheme

Find further detailed guidance on the CJRS here: https://www.gov.uk/guidance/check-which-employees-you-can-put-on-furlough-to-use-the-coronavirus-job-retention-scheme?utm_source=6523fc74-0b83-4f25-b14a-280abf8ef134&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate


Updated – 12th August 2020

HMRC: Live webinars on job retention scheme and statutory sick pay rebate scheme

Extension to the Coronavirus Job Retention Scheme and flexible furloughing

HMRC will provide an overview of the scheme, including flexible furloughing, examples of how to work out the amount you can claim, and the changes due in September and October.

See: https://register.gotowebinar.com/rt/8528021499696163331?source=August-HMRC-DCS-Supp-Emp-2

If you haven’t been able to join HMRC webinar about the Coronavirus (COVID-19) Statutory Sick Pay Rebate Scheme, more dates have now been added. Get the latest information on:

See: https://register.gotowebinar.com/rt/3667545685723120643?source=August-HMRC-DCS-Supp-Emp-2


Updated – 10th August 2020

HMRC have published additional information on the job retention bonus

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, December and January, 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.

As the employer, you will be able to claim the bonus after you 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.

What you need to do now

If you intend to claim the Job Retention Bonus you must:

Reminder of changes to CJRS

From 1 August 2020 CJRS continues to provide grants for furloughed employees but no longer funds employers’ National Insurance (NI) and pension contributions. You now have to make these payments from your own resources for all employees, whether furloughed or not. HMRC guidance has been updated to reflect these changes.

Making sure your data is right

It is important that you provide the data HMRC need to process your claim. Payment of your grant may be at risk or delayed if you submit a claim that is incomplete or incorrect. HMRC may be in touch to request employee data if it’s missing from your previous claims.

National Insurance numbers

You need to provide a National Insurance number (NINO) for all employees as part of your CJRS claim. The only exception is in the very limited circumstances where an employee genuinely does not have a NINO, for example if they are under 16 years old.

If you are claiming for an employee whose NINO you do not currently know, you can check their number by searching GOV.UK for ‘Check a National Insurance Number using basic PAYE Tools’.

HMRC can no longer accept claims for fewer than 100 employees by phone where you do not have all employee NINO’s unless the employees you are claiming for genuinely do not have these.

Claimed too much in error?

If you have claimed too much for a CJRS grant and have not repaid it, you must notify HMRC and repay the money by the latest of whichever date applies below:

See:  https://www.gov.uk/government/news/further-details-of-the-job-retention-bonus-announced


Updated – 5th August 2020

Job retention bonus

The government is introducing a new Job Retention Bonus to provide additional support to employers who keep on their furloughed employees in meaningful employment, after the government’s Coronavirus Job Retention Scheme ends on 31 October 2020.

The Job Retention Bonus is a one-off payment to employers of £1,000 for every employee who they previously claimed for under the scheme, and who remains continuously employed through to 31 January 2021. Eligible employees must earn at least £520 a month on average between the 1 November 2020 and 31 January 2021. Employers will be able to claim the Job Retention Bonus after they have filed PAYE for January and payments will be made to employers from February 2021.

An employer will be able to claim the Job Retention Bonus for any employees that were eligible for the Coronavirus Job Retention Scheme and they have claimed a grant for. Where a claim for an employee was incorrectly made, a Job Retention Bonus will not be payable.

All employers are eligible for the scheme including recruitment agencies and umbrella companies.

Employers should ensure that they have:

Employers must keep their payroll up to date and accurate and address all requests from HMRC to provide missing employee data in respect of historic Coronavirus Job Retention Scheme claims. Failure to maintain accurate records may jeopardise an employer’s claim.

See:  https://www.gov.uk/government/publications/job-retention-bonus/job-retention-bonus


Coronavirus job retention scheme (CJRS) – examples to help you calculate your employees’ wages

Check examples to help you calculate your employee’s wages, National Insurance contributions and pension contributions if you’re claiming through the Coronavirus Job Retention Scheme.

See:  https://www.gov.uk/government/publications/find-examples-to-help-you-work-out-80-of-your-employees-wages?utm_source=42b982a3-cce5-43f1-a9b2-919a3ab56d6a&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

Remember to talk to us about any claims we can estimate your claim for August, September and October in advance.


CJRS – Individuals you can claim for who are not employees

You can claim a grant for individuals – as long as they’re paid via PAYE. The groups you can claim for include:

Individuals who are paid through PAYE but not necessarily employees in employment law, can continue to be furloughed from 1 July as long as you have previously submitted a claim for them for a furlough period of at least 3 weeks between 1 March and 30 June and submitted a claim for this by 31 July.


Updated – 3rd August 2020

New legislation introduced to protect redundancy pay of furloughed workers

The Government has announced that from 31 July 2020 any furloughed worker that is made redundant will receive a payment based on their normal wage rather than the reduced rate of pay they may have received under the Coronavirus Job Retention Scheme (CJRS).

Reports of a small number of employers taking advantage of the Coronavirus crisis to pay a lower rate for redundancies has led the Government to introduce new laws that ensure that workers get the full rate of redundancy pay.

Workers that have more than two years of continuous service are typically entitled to a statutory redundancy payment that is based on length of service, age and pay; up to a statutory maximum of £16,140.

However, under the CJRS many of the 9.5 million workers that have been furloughed are currently being paid 80 per cent of their normal wage unless their employer has opted to top up their pay.

As well as ensuring redundancy pay is protected, the new rules also make sure that statutory notice pay, which covers the period before a worker’s employment ends is based on an employee’s normal wages rather than the lower wage rate they may have been paid under the CJRS.

This paid notice period typically varies from one to 12 weeks’ depending on an employee’s length of service.

Furloughed employees that successfully undertake an unfair dismissal claim will also have their basic award payment based on full pay rather than the CJRS’s reduced wage rate under the new legislation.

If you would like advice on redundancy or have questions about the furlough scheme then it is important that you seek professional advice. To find out how we can help, please contact us.


Updated – 29th July 2020

Coronavirus job retention scheme (CJRS)  

The government reminds employers that the 31 July is the last day that they can submit claims for periods ending on or before 30 June. Employers can now submit claims for periods starting on or after 1 July.

See: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme?utm_source=24698feb-73f3-45a2-a0f8-e443a374d1f6&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

If you have claimed too much or not enough from the CJRS

 If you have claimed too much or if you want to delete a claim in the online service, you must do this within 72 hours.

If you have made an error in a claim that means you have received too much, you must pay this back to HMRC. You can either:

If you’ve overclaimed a grant and have not repaid it, you must notify HMRC by the latest of either:

If you do not do this, you may have to pay a penalty. If you do repay any overclaimed grant, this will prevent any potential tax liability in respect of the overpayment of Coronavirus Job Retention Scheme. HMRC will not be actively looking for innocent errors in their compliance approach.

Find out more about when you may have to pay a penalty and other information, including:

See: https://www.gov.uk/government/publications/penalties-for-not-telling-hmrc-about-coronavirus-job-retention-scheme-grant-overpayments-ccfs48

If  you have not claimed enough

If you have made an error that has resulted in receiving too little money, you will still need to ensure you pay your employees the correct amount. You should contact HMRC to amend your claim. As you are increasing the amount of your claim, they may need to conduct additional checks.

After 31 July, you will no longer be able to amend a claim relating to the period up to 30 June to add an employee that should have been included on a claim submitted before that date. You must make sure that any remaining claims still to be made for the period to 30 June include all of your eligible employees. Amendments for any other errors you made that resulted in you not claiming enough will still be permitted after 31 July.

For the full details see: https://www.gov.uk/guidance/if-youve-claimed-too-much-or-not-enough-from-the-coronavirus-job-retention-scheme?utm_source=83a547f1-9dc1-4222-b096-e6c48a5d192c&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate


Updated – 22nd July 2020

Government confirms Job Retention Bonus of £1,000

During the Summer Economic Update, the Chancellor Rishi Sunak announced his Plan for Jobs, which included a new incentive for users of the Coronavirus Job Retention Scheme (CJRS) to keep furloughed workers employed until January 2021.

The Job Retention Bonus (JRB) will encourage employers to bring back furloughed employees by allowing them to claim a £1,000 payment for every previously furloughed worker that is retained.

To qualify for the JRB, an employer must bring employees back to work in roles that pay above the Lower Earnings Limit of £520 per month on average, between the end of the CJRS and the end of January 2021.

If an employer keeps the employee in employment and meets the criteria of the scheme a JRB payment will be made from February 2021 for each eligible employee.

Further information about the JRB is expected from the Government on 31 July 2020.


Upcoming key dates for the Coronavirus Job Retention Scheme

In the next few weeks, employers may need to submit additional information or change the way they manage their Coronavirus Job Retention Scheme (CJRS) claims. To help you prepare, here are some key dates and actions you may need to take:

30 July 2020 – Submit your CJRS claim for periods ending on or before 30‌‌‌ ‌June 2020. This is the last date you can make these claims. You need to have claimed at any point on or before 31‌‌‌ ‌July to be able to claim for future months.

1‌‌‌ ‌August 2020 – The CJRS will no longer pay for employers’ National Insurance (NI) and pensions contributions for furloughed employees. Employers have to make these payments from their own resources after this date.

1‌‌‌ ‌September 2020 – Employers will have to start contributing to the wages of furloughed employees. Grants will be for 70 per cent of usual wages in September, but furloughed employees will continue to be entitled to receive at least 80 per cent of their usual wages and so employers are expected to make up the difference from their own resources.

Employers that are struggling to administer the changes to the CJRS should seek professional support to ensure they are compliant as HM Revenue & Customs is taking a tough, proactive approach to errors and fraudulent claims.


Updated – 14th July 2020

HM Revenue & Customs confirms first arrest in connection with furlough fraud

HM Revenue & Customs (HMRC) has revealed that a 57-year-old man from Solihull in the West Midlands was arrested on 8 July on suspicion of a £495,000 furlough fraud relating to claims from the Coronavirus Job Retention Scheme (CJRS).

HMRC says he is the first person to have been arrested in connection with fraudulent claims from the scheme.

As of 12 July, more than £28.7 billion had been claimed from the scheme by 1.2 million employers in respect of 9.4 million jobs.

HMRC says that the CJRS has four lines of defence against fraud, which it describes as:

Richard Las, the Acting Director at HMRC’s Fraud Investigation Service, said: “The CJRS is part of the collective national effort to protect jobs. The vast majority of employers will have used the CJRS responsibly, but we will not hesitate to act on reports of abuse of the scheme.

“This is taxpayers’ money and any claim that proves to be fraudulent limits our ability to support people and deprives public services of essential funding.”

He called on people to report suspected furlough fraud via HMRC’s online fraud reporting page here.


Updated – 3rd July 2020

Check if you can claim for your employees’ wages through the coronavirus job retention scheme – flexible furlough claims now open

Employers can now submit furlough claims for periods starting on or after 1 July.

If you cannot maintain your workforce because your operations have been affected by coronavirus (COVID-19), you can furlough employees and apply for a grant to cover a portion of their usual monthly wage costs where you record them as being on furlough.

From 1 July, employers can bring furloughed employees back to work for any amount of time and any work pattern, while still being able to claim the grant for the hours not worked. From this date, only employees that you have successfully claimed a previous grant for will be eligible for more 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 and 30 June 2020. For the minimum 3 consecutive week period to be completed by 30 June, the last day an employee could have started furlough for the first time was 10 June. This may differ if you have an employee returning from statutory parental leave.

From 1 August 2020, employers will be asked to contribute towards the cost of their furloughed employees’ wages.

Who can claim?

You can claim for any employees you have furloughed if you have:

For employees that meet the criteria above, the amount you claim for in any single claim period starting from 1 July cannot exceed the maximum number of employees you claimed for under any claim ending by 30 June.

For example, an employer had previously submitted three claims between 1 March 2020 and 30 June, in which the total number employees furloughed in each respective claim was 30, 20 and 50 employees. Then the maximum number of employees that employer could furlough in any single claim starting on or after 1 July would be 50.

Agreeing to furlough employees

Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.

To be eligible for the grant, employers must have confirmed to their employee (or reached collective agreement with a trade union) in writing that they have been furloughed. You must:

The employee does not have to provide a written response and you do not need to place all your employees on furlough.

Prior to 1 July 2020, employees on furlough cannot undertake any work for you other than training. From 1 July, you will:

If you flexibly furlough employees, you will need to agree this with the employee (or reach collective agreement with a trade union) and keep a new written agreement that confirms the new furlough arrangement. You will need to:

You do not need to place all your employees on furlough, and you can continue to fully furlough employees if you wish. Employees cannot undertake any work for you during time that you record them as being on furlough.

Using minimum furlough periods

Until 1 July 2020, any employees you place on furlough must be furloughed for a minimum of 3 consecutive weeks. When they return to work, they must be taken off furlough. Employees can be furloughed more than once, but they must be furloughed for a minimum of 3 consecutive weeks each time they are furloughed.

From 1 July, agreed flexible furlough agreements can last any amount of time. Employees can enter into a flexible furlough agreement more than once.

Where a previously furloughed employee starts a new furlough period before 1 July this furlough period must be for a minimum of 3 consecutive weeks. This is the case regardless of whether the 3 consecutive week minimum period ends before or 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, after 1 July, employers cannot make claims that cross calendar months, so the employer will need to make a separate claim for the period up to 30 June.

Although flexible furlough agreements can last any amount of time, unless otherwise specified the period that you claim for must be for a minimum claim period of 7 calendar days.

If you make an error when claiming

If you want to delete a claim in the online service, you must do this within 72 hours.

If you have made an error in a claim that has resulted in an over claimed amount, you must pay this back to HMRC.

If you are making another claim then you can tell HMRC about an over claimed amount as part of this. When you make your next claim you will be asked whether you need to reduce the amount to take account of a previous over claim. Your new claim amount will be reduced to reflect the over claimed amount and you should keep a record of this adjustment for 6 years.

If you have made an error in a claim and do not plan to submit further claims, you should contact HMRC to let them know about your error and find out how to pay back any over claimed amounts. Once you have contacted HMRC you will be given a payment reference number and directed to make a payment.

If you have made an error that has resulted in an under claimed amount, you should contact HMRC to amend your claim. As you are increasing the amount of your claim, they need to conduct additional checks.

For more information see: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme?utm_source=b8bc2614-b5a2-4841-ad9b-e3255de6c543&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate


Updated – 30th June 2020

Government clarifies furlough scheme stance for employers 

Only employees who have been furloughed for at least three weeks on or before 30 June 2020 are eligible for the final phase of the scheme. 

Employers had until 10 June 2020 to place any workers on the job retention scheme if they wanted to take advantage of it until 31 October 2020.

Jeremy Coker, president at the Association of Taxation Technicians, said:

“Unless an employee has been furloughed at some point between 1 March and 30 June 2020, for a minimum of three continuous weeks, it will not be possible to furlough them between 1 July and 31 October.

“Employers should be aware that from 1 July, the number of employees they can include on claims for periods from that date will be capped.

“The cap will be equal to the maximum number of employees previously claimed for in the first three months of the scheme.”

Since 1 March 2020, the Treasury has offered to cover up to 80% of the salaries of workers who were unable to do their jobs from home due to coronavirus.


Updated – 24th June 2020

Coronavirus job retention scheme: step by step guide for employers

The Government have released a step by step guide explaining the information that employers need to provide to HMRC to make a claim through the Coronavirus Job Retention Scheme. It also describes the processes involved.

See: https://www.gov.uk/government/publications/coronavirus-job-retention-scheme-step-by-step-guide-for-employers?utm_source=71b15dc4-4767-4c4e-84d0-0b94e794340a&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

A Welsh translation is now available see:

https://www.gov.uk/government/publications/changes-to-the-coronavirus-job-retention-scheme?utm_source=51a7934f-d505-48d5-b576-488fe842b2c0&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

 


Updated – 20th June 2020

Coronavirus job retention scheme – download a template if you are claiming for 100 or more employees 

You can now download and complete a template with the details of the employees you are claiming for and upload this when you claim (for claims on or after 1 July 2020).

Use this link to download your template: https://www.gov.uk/government/publications/download-a-template-if-youre-claiming-for-100-or-more-employees-through-the-coronavirus-job-retention-scheme?utm_source=39bc9a5c-5198-492e-a21a-816ef4922b17&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate


Updated – 17th June 2020

Check which employees you can put on furlough to use the coronavirus job retention scheme

This guidance page was updated on 15 June 2020 to include details on how the scheme will change from 1 July.

The first time you will be able to make claims for days in July will be 1 July, you cannot claim for periods in July before this point.

31 July is the last day that you can submit claims for periods ending on or before 30 June.

See: https://www.gov.uk/guidance/check-which-employees-you-can-put-on-furlough-to-use-the-coronavirus-job-retention-scheme?utm_source=13e820c2-94c1-42fc-8ef6-e0dea23dff1d&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate


Updated – 12th June 2020

Keep on top of the latest changes to the coronavirus job retention scheme here:

https://www.gov.uk/government/publications/changes-to-the-coronavirus-job-retention-scheme/changes-to-the-coronavirus-job-retention-scheme


Updated – 10th June 2020

Coronavirus job retention scheme: supplementary guidance for research organisations

The Coronavirus (COVID-19): financial support for education, early years and children’s social care page, published 17 April, includes guidance for higher education providers on the use of the Coronavirus Job Retention Scheme for research work.

The government’s objective has been for research to continue or recommence wherever possible, and research settings were included in the guidance on safer working published on 11 May.

However, in some instances research cannot continue and therefore institutions have made use of government coronavirus support schemes, including the CJRS, to retain their research capabilities.

To support final decisions on furloughing staff before the 10 June deadline for notifications, the Government are setting out supplementary guidance for the research sector.

See:

https://www.gov.uk/government/publications/coronavirus-job-retention-scheme-guidance-for-research-organisations/coronavirus-job-retention-scheme-supplementary-guidance-for-research-organisations


Coronavirus job retention scheme: people receiving direct payments

How the Coronavirus Job Retention Scheme (CJRS) can be used by direct payment holders who employ people for their care. This guidance helps people who buy care and support through a direct payment to know how and when they can use the CJRS to furlough employees during the coronavirus (COVID-19) outbreak.

It includes examples of when direct payment holders may or may not choose to use the CJRS, employ people for their care.

See: https://www.gov.uk/government/publications/coronavirus-job-retention-scheme-people-receiving-direct-payments?utm_source=6dc998fd-c24c-4159-b209-8c5aa1bbbde2&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate


Updated – 8th June 2020

Updated news on coronavirus job retention scheme

The Coronavirus Job Retention Scheme is changing:

From 1 July, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim the Coronavirus Job Retention Scheme grant for their normal hours not worked. When claiming the grant for furloughed hours employers will need to report and claim for a minimum period of a week.

The scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full 3-week period prior to 30 June.

This means that the final date by which an employer needs to agree with their employee and ensure they place them on furlough is 10 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.

Further guidance on flexible furloughing and how employers should calculate claims will be published on 12 June. Find out more information on how the Coronavirus Job Retention Scheme is changing.

See:

https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme?utm_source=87f40ebb-df6b-4d74-8886-19c77c76524c&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate


Updated – 2nd June 2020

The coronavirus job retention scheme (CJRS) is changing!

UK Chancellor Rishi Sunak outlined changes to the furlough scheme during the daily press briefing (29 May 2020).

The Chancellor stated that in June and July the furlough scheme will continue as before, but employers will be asked to cover National Insurance and employer pension contributions in August.

By Septemberbusinesses will pay 10% of wages for furloughed staff, and in October 20%, the UK chancellor said.

This means the subsidy will taper off from August, with businesses expected to pay a greater share of their staff salaries, starting with covering National Insurance and pension contributions.

From September the government will cover only 70% of salaries, to a cap of £2,190 and from October it will pay 60%, to a cap of £1,875. Employers will make up the shortfall to get salaries back to 80% of pre-Covid lockdown levels.

After that, the scheme will close.

Flexible Furloughing of employees

From 1 July, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim CJRS grant for their normal hours not worked. When claiming the CJRS grant for furloughed hours employers will need to report and claim for a minimum period of a week.

The scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full 3-week period prior to 30 June.

This means that the final date by which an employer can furlough an employee for the first time will be 10 June, in order for the current 3-week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.

Further guidance on flexible furloughing and how employers should calculate claims will be published on 12 June.

See:  https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme

Please contact us should you have any queries.


Updated – 13th May 2020

Coronavirus Job Retention Scheme (CJRS) extended until October

The Chancellor, Rishi Sunak, has confirmed that the Coronavirus Job Retention Scheme (CJRS) will be extended until the end of October, with no changes until the end of July when employers currently using the scheme will be able to bring back furloughed employees part time.

From August, the Government has said that furloughed workers will continue to receive 80 per cent of their usual salaries capped at £2,500. However, employers will have to make a currently unspecified contribution to this cost. Details of these arrangements are due to be published by the end of May.

The CJRS currently allows employers to retain employees on the PAYE payroll who are not carrying out work for them by placing them on furlough and to claim a grant of 80 per cent of a furloughed employee’s usual pay, plus employer National Insurance Contributions (NICS) and minimum employer auto-enrolment pension contributions.

The Chancellor said that since the scheme was launched in March, more than one million businesses have furloughed more than 7.5 million workers.

Please contact your usual point of contact should you have any queries regarding this.


Updated – 28th April 2020

Certain sectors see access to the Coronavirus Job Retention Scheme restricted

Some sectors that receive payments from the Government as well as from private sources have seen their access to the Coronavirus Job Retention Scheme (CJRS) restricted.

The CJRS allows employers to retain employees on the PAYE Payroll who are not carrying out work for them by placing them on furlough and to claim a grant of 80 per cent of a furloughed employee’s usual pay up to a limit of £2,500 a month.

Employers can also claim for employer National Insurance Contributions (NICS) and minimum employer auto-enrolment pension contributions.

Furloughed workers must not carry out any work for their employers or for connected organisations.

However, the Department for Education (DfE) has now issued guidance to education providers, including private day nurseries, informing them that they should take into account any public funding they are still receiving when working out how much to claim from the CJRS.

The guidance states that private nurseries can only apply to the scheme where it meets a number of specific conditions, including that “the grant from the Coronavirus Job Retention Scheme would not duplicate other public grants received, and would not lead to financial reserves being created.”

It adds: “…an early years provider can access the CJRS to cover up to the proportion of its paybill which could be considered to have been paid for from that provider’s private income. This would typically be income received from ‘parent-paid’ hours, and excludes all income from the government’s free entitlements (or ‘DSG income’) for all age groups.”

Meanwhile, the Department for Culture, Media and Sport (DCMS), has been told by the Treasury that organisations in the heritage sector that receive public funding and which access the CJRS should not top-up the salaries of furloughed employees.


Updated – 22nd April 2020

Administering the Coronavirus Job Retention Scheme

We appreciate that you are probably hard at work making the necessary arrangements and sourcing the required information for the Coronavirus Job Retention Scheme (CJRS) at the moment.

The portal went live this week and can be accessed by clicking here. Initial reports suggest that more than 140,000 businesses have made an application so far.

To help you make sense of the CJRS and the application process, we wanted to share some useful documents and calculators with you:

Step-by-Step Guide 

HM Revenue & Customs (HMRC) has created a useful step-by-step PDF guide to help with the application process, which can be downloaded and followed here.

CJRS claim calculator 

To help calculate your claim and check it, the Government has designed a dedicated calculator. This is useful for calculating a basic regular salaried claim but is not able to calculate complex claims involving TUPE, top-up payments or pension contributions made outside of auto-enrolment, so please be aware. The calculator can be accessed here.

Webinar

HMRC has also created a 25-minute webinar that covers the CJRS basics and how applications can be made. This can be accessed here.

What we are learning from those who are applying for the scheme is that this isn’t a one size fits all process and certain employees or businesses will have requirements that are outside of the usual parameters of the scheme.

You should prepare all of the necessary information for the application beforehand, including calculations for those staff members that have been furloughed to make administering this task easier.

We thoroughly recommend that you seek advice if you are struggling to apply for the scheme or if you need help calculating your payroll.


Updated – 21st April 2020

Coronavirus Job Retention Scheme online portal launches

The Coronavirus Job Retention Scheme (CJRS) online application portal went live at 8am on Monday 20 April 2020.

The CJRS allows employers to retain employees on the PAYE Payroll who are not carrying out work for them by placing them on furlough for a period of between three weeks and four months, unless the scheme is extended further.

The employer can then claim a grant of 80 per cent of a furloughed employee’s usual pay, plus employer National Insurance Contributions (NICS) and minimum employer auto-enrolment pension contributions. According to HM Revenue & Customs (HMRC), the portal can handle as many as 450,000 applications an hour. It says that grants will be in employers’ bank accounts within six days of applying, so that firms that run their payroll at the end of the month have the funds in time for their April payroll.

At the same time, HMRC has published detailed guidance on how employers can calculate the amounts they are entitled to claim, including for those where salaries vary or there is other complexity in the employment relationship.

The new guidance is available here:

Amid fears that the scheme is vulnerable to fraud, HMRC has also launched an online portal for employees and members of the public to report suspected fraudulent claims.


Updated – 22nd April 2020

Administering the Coronavirus Job Retention Scheme

We appreciate that you are probably hard at work making the necessary arrangements and sourcing the required information for the Coronavirus Job Retention Scheme (CJRS) at the moment.

The portal went live this week and can be accessed by clicking here. Initial reports suggest that more than 140,000 businesses have made an application so far.

To help you make sense of the CJRS and the application process, we wanted to share some useful documents and calculators with you:

Step-by-Step Guide 

HM Revenue & Customs (HMRC) has created a useful step-by-step PDF guide to help with the application process, which can be downloaded and followed here.

CJRS claim calculator 

To help calculate your claim and check it, the Government has designed a dedicated calculator. This is useful for calculating a basic regular salaried claim but is not able to calculate complex claims involving TUPE, top-up payments or pension contributions made outside of auto-enrolment, so please be aware. The calculator can be accessed here.

Webinar

HMRC has also created a 25-minute webinar that covers the CJRS basics and how applications can be made. This can be accessed here.

What we are learning from those who are applying for the scheme is that this isn’t a one size fits all process and certain employees or businesses will have requirements that are outside of the usual parameters of the scheme.

You should prepare all of the necessary information for the application beforehand, including calculations for those staff members that have been furloughed to make administering this task easier.

We thoroughly recommend that you seek advice if you are struggling to apply for the scheme or if you need help calculating your payroll.


Updated – 16th April 2020

Coronavirus Job Retention Scheme (CJRS) cut-off date extended to 19 March 2020

The Government has announced that the cut-off date for the Coronavirus Job Retention Scheme (CJRS) has been extended from 28 February 2020 to 19 March 2020, potentially enabling employers to furlough employees taken on during that period.

The CJRS allows employers to retain employees on the PAYE Payroll who are not carrying out work for them by placing them on furlough and to claim a grant of 80 per cent of a furloughed employee’s usual pay, plus employer National Insurance Contributions (NICS) and minimum employer auto-enrolment pension contributions.

The updated guidance published on Wednesday 15 April 2020 states that to be eligible for the scheme, an employee must have been on the employer’s PAYE payroll on or before 19 March 2020 and HM Revenue & Customs (HMRC) must have been notified of a payment through Real Time Information (RTI) by that date.

The Treasury says that it expects the extension of the cut-off date to benefit more than 200,000 employees, who employers would otherwise have been unable to furlough.

The new guidance also changes the arrangements for employees made redundant or who left their employment voluntarily in recent months. The guidance now states that anyone on an employer’s payroll on 28 February 2020 and notified to HMRC on an RTI submission on or before that date who stopped working for their employer prior to 19 March 2020 can be re-employed and furloughed.

At the same time, the Treasury has issued a Direction, giving instructions to HMRC for making payments under the CJRS.

Crucially, the direction confirms that the scheme applies to anyone who is furloughed “by reason of circumstances as a result of coronavirus disease.”

The Direction also provides an exemption for company directors who are also furloughed employees to carry out duties “relating to the filing of company accounts or provision of other information relating to the administration of the director’s company…”

At the same time, it confirms that there must be a written agreement between the employer and the furloughed employee “that the employee will cease all work in relation to their employment”.

HMRC has confirmed that it expects the scheme to come into effect next week.


Updated – 14th April 2020

Easter Weekend updates to the Coronavirus Job Retention Scheme

Over the Easter Weekend, the Government published a further update to its guidance on the operation of the Coronavirus Job Retention Scheme (CJRS).

The CJRS allows employers to retain employees on the PAYE Payroll who are not carrying out work for them by placing them on furlough and to claim a grant of 80 per cent of a furloughed employee’s usual pay, plus employer National Insurance Contributions (NICS) and minimum employer auto-enrolment pension contributions.

The updated guidance provides further clarification to employers on a number of points, including:

Information required to make a claim

Additionally, the Government has set additional information that employers will need to provide in order to be able to make a claim. The new full list of required information is:

IR35 in the public sector

Within the updated guidance, the Government has provided detailed information about how the CJRS will work for contractors working within the scope of the IR35 off-payroll working rules in the public sector.

The guidance states that it may be appropriate to furlough IR35 contractors deemed employees “in a small number of cases”.

The public sector organisation would then have to confirm this with both the contractor’s Personal Service Company (PSC) and the fee-payer and agree between the parties that the contractor will not carry out work for the organisation during the period of furlough.

The fee-payer – usually the agency that pays the PSC – will have apply for a furlough payment of 80 per cent of the monthly contract up to the £2,500 cap and the employer National Insurance Contributions (NICS).

The fee-payer will then need to pay the furlough payment in respect of wages to the PSC via PAYE and make the necessary tax and NIC deductions.

The PSC will have to report the payment to the contractor as deemed employment income via PAYE using box 58A on the PAYE Real Time Information return.

If a contractor opts to furlough themselves as an employee or director of their PSC, and they are still receiving an income from a public sector organisation, including through the CJRS, they must deduct this income from their reference pay for the CJRS.


Updated – 6th April 2020

Coronavirus Job Retention Scheme – Updated information with effect from 6th April 2020

The government have today provided further updates on the application of the Coronavirus Job Retention Scheme (Furlough).  This provides more details of how this will work, in particular for directors of limited companies, but also providing guidance for salaried members of limited liability partnerships and those working via agencies, including umbrella companies.

The guidance is particularly welcomed for those who are company directors as it does confirm that salaried company directors can be furloughed subject to certain conditions.  It must be remembered that company directors do have obligations under the Companies Act 2006 and these duties need to be considered when making the decision to furlough a director.

The key points are:

1)     If a company considers that it is able to comply with its statutory duties, then the Board of Directors can decide that individual directors can be furloughed.

2)     If the furloughed director needs to carry out particular duties to fulfil statutory obligations to the company, then they can still do this.  However, this does not mean that they should carry out work of a kind that they would normally carry out to generate commercial revenue or provide services to or on behalf of their company, i.e if they are still working.

3)      For clarity this does also apply to salaried individuals who are directors of their own personal service company.

As a result, this may mean that all directors of a company could apply to be put in furlough if work has dried up.  It should be noted that once in furlough this will have to be in place for three weeks and you cannot return to work in that period.  If you do return to work in that period, no amount will be due in respect of furlough.

 If work is continuing or there is a need to work to manage ongoing contracts, then it will be likely that at least one director should remain outside furlough.

To help clients with this, we have set up a service to provide the necessary paperwork for the directors to confirm their position re furlough.  If you would like our assistance, please complete the following form and we will prepare this for you.

Please note that where we already assist with your payroll function, we will also process the necessary filing through the PAYE scheme, subject to your answers to the form.

The links to the revised guidance is as follows:

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-guidance-for-employees

https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme


Updated – 27th March 2020

Accessing the Coronavirus Job Retention Scheme

With substantial restrictions for everyone on the circumstances in which we can leave our homes, and many businesses being forced to close, the Chancellor has announced a scheme to reimburse up to 80 per cent of the cost of the wages of ‘furloughed workers’.

What is a ‘furloughed worker’?

Anyone designated as a ‘furloughed worker’ will remain on your payroll, rather than being laid off. However, they will not carry out any work for your business or organisation. There is no option to keep them working on reduced hours.

They will generally be people who would otherwise be at risk of being laid off or being made redundant.

Furloughed employees will still accrue continuous service and will still be entitled to the usual terms and conditions of their employment, other than pay and benefits. This means that their contractual notice period remains in effect during a period of furlough and they would remain entitled to statutory redundancy payment in the event they are made redundant during their furlough.

How do I designate an employee as a ‘furloughed worker’?

You will need to notify the relevant employee that you are changing their employment status to ‘furloughed worker’.

Designating someone as a ‘furloughed worker’ remains subject to the provisions of existing employment law and their contract of employment and so, because ‘furlough’ is a new concept, in most circumstances, it will be necessary to agree to a furlough with the employee concerned. This agreement should ideally be made in writing.

An employee cannot designate themselves as a ‘furloughed worker’.

Can I force someone to become a ‘furloughed worker’?

This is unlikely, but where the alternative is that they will lose their employment entirely, owing to being at risk of lay-off or redundancy, fewer workers are likely to decline to be designated as a ‘furloughed worker’.

What do I get if I designate an employee as a ‘furloughed worker’?

HM Revenue & Customs will provide you with a sum equivalent up to 80 per cent of each furloughed workers’ total wage costs, up to a limit of £2,500 a month, for three months initially, backdated to 1 March 2020. This excludes National Insurance Contributions and Pension Contributions. Click here to find out more.

Can I pay the ‘furloughed worker’ more than 80 per cent of their usual salary?

Yes – you are free to do so if you wish but you are not required to do so. For higher-earning employees who are paid more than £2,500 a month, this could be very expensive. However, this cost needs to be balanced against the benefit of helping to retain that employee in the business.

Can workers be brought back to the business and placed on furlough where they have been dismissed owing to a lack of work?

It appears that this will be possible if the employer agrees to bring the employee back and keep them on the payroll. The cut-off date for employees dismissed in these circumstances is 28 February 2020.

How do I apply to the scheme?

HMRC is setting up a new online portal through which you will be able to make applications. The Government has said that it will be ready in time for the first payments under the scheme to reach businesses before the end of April.

What information do I need to provide?

Full details of the information that you will need to provide to access funds under the scheme have not yet been announced. However, we anticipate that you will need to provide the below:

 For detailed advice and for help to manage your payroll and access the scheme, please contact our payroll team we are here to help.