Magee Gammon Employee Furlough and CJRS/JSS

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.

 


Latest update – 16th November 2020

Furlough scheme update – publication of claims and the rules on employees serving notice

HM Revenue & Customs (HMRC) has confirmed that employees serving notice cannot be claimed for from the Coronavirus Job Retention Scheme (CJRS) from 1 December 2020 onwards.

It has also confirmed further details of plans to disclose details of claims made by employers from December onwards.

Notice periods

The change means employers cannot claim furlough grants in respect of employees serving any contractual or statutory notice periods from 1 December onwards. This includes employees serving notice of redundancy, as well as those who are serving notice of resignation or retirement.

In circumstances from 1 December onwards where you have already submitted a claim and an employee subsequently begins a notice period, you must make an adjustment.

For claims relating to November, you can still claim for employees serving statutory notice periods. However, CJRS grants cannot be used to substitute redundancy payments.

Redundancies must be made in accordance with employment law, while statutory redundancy and statutory notice pay must be calculated based on an employee’s usual wages.

Publications of claims

HMRC has also published further details of plans to publish information about claims for periods from December onwards.

HMRC previously confirmed plans to publish the names and registration number of limited companies and Limited Liability Partnerships (LLPs) claiming CJRS grants.

It has now clarified that this applies to all employers claiming from the scheme, including individuals, ordinary partnerships and trusts, unless they can demonstrate doing so would lead to a “serious risk of violence or intimidation”.

HMRC will require evidence of this threat, which could include:

At the same time, HMRC has also said that, in addition to employer names and reference numbers, it will also publish “an indication of the value of the claim”.

Further information about what this will mean in practice and how to request that claim information is not published is expected by the end of November.

For advice on furlough and the CJRS, please contact us today.


Updated – 12th November 2020

Extended Coronavirus Job Retention Scheme FAQ

Employers across the UK will have welcomed the Government’s recent decision to extend the furlough scheme, also known as the Coronavirus Job Retention Scheme (CJRS), until the end of March 2021.

The Government hopes this will help businesses to protect jobs by offering a subsidised wage equivalent to 80 per cent of an employee’s normal wage, up to a limit of £2,500, for the time not worked, with associated National Insurance and Workplace Pension contributions paid by the employer. 

This builds on the previous scheme and introduces a number of new rules, including:

Like the previous scheme, the rules surrounding furlough are complex and so we have created a helpful FAQ to answer common questions you may have.

Extended Coronavirus Job Retention Scheme FAQ 

What does the CJRS offer?

The Coronavirus Job Retention Scheme (CJRS) is a temporary scheme open to all UK employers until 31 March 2021 that is designed to support employers whose operations have been severely affected by the pandemic.

Employers can use HM Revenue & Customs’ (HMRC) dedicated portal to claim for 80 per cent of furloughed employees’ usual monthly wage costs, up to £2,500 a month, for any hours not worked.

However, they must pay for the associated employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage, as well any wages for hours that are worked.

The Government has reserved the right to review the scheme in January 2021, which may lead to additional contribution requirements.

Is my business eligible? 

Any UK organisation with employees can apply for the scheme including:

Publicly funded organisations are not expected to use the scheme, but partially publicly funded organisations may be eligible where their private revenues have been disrupted.

Employers do not need to have used the CJRS previously. However, you only have until this Friday 13 November to agree to retrospectively furlough or flexibly furlough an employee from 1 November.

Employers across the UK can claim, whether their business is open or closed.

Which employees are eligible? 

The scheme is open to all employees for whom a Real Time Information (RTI) submission had been made on or before 30 October 2020.

Neither the employer nor the employee needs to have used the CJRS previously to use the extended scheme.

The scheme will otherwise operate as it has done previously and will be open to employees on any type of contract. You will also be able to top-up employee wages above the value of CJRS grant if you wish to do so.

You will need to agree full furlough or flexible furlough arrangements with employees, in accordance with employment law and their contracts of employment.

There is no maximum number of employees you can claim for from 1 November 2020.

How does flexible furlough work? 

Employees can work for any amount of time, and any work pattern and claim the grant for the furloughed hours, with reference to hours the employee would usually have worked in that period.

This means furloughed employees will be able to work reduced hours, paid by their employer in full, while the employer can claim a CJRS grant in respect of 80 per cent of the pay for usual hours not worked.

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

When will the scheme end?

When launched in March the scheme was initially only due to run for a month or so, but the Government then extended the scheme until 31 October 2020.

In light of the month-long lockdown in November, the scheme was extended until 2 December 2020 but has now been extended further until 31 March 2021.

When the scheme closes next year, you must decide to either:

When and how can I apply?

The extended CJRS operates as the previous scheme did, in several respects. Firstly, employers must report and claim for a minimum period of seven consecutive calendar days.

Secondly, employers will need to report actual hours worked and the usual hours an employee would be expected to work in a claim period.

Finally, for hours worked, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.

Under the rules, the claim period must also start and end within the same calendar month.

Where the pay period includes days in more than one month, separate claims will need to be submitted covering the days that fall into each month. These claims should be calculated separately, based on the specific rules and contributions for that period.

A claim can be made in anticipation of an imminent payroll run, at the point an employer runs their payroll or after they have run their payroll.

There is no gap in eligibility of support between the previously announced end-date of CJRS on 31 October 2020 and this extension starting 1 November 2020.

However, all claims for periods from 1 July 2020 to 31 October 2020 must be submitted no later than 30 November 2020.

You will be able to claim from 8am on Wednesday 11 November 2020 for the extended furlough. Please be aware that claims relating to November 2020 must be made by 14 December 2020.

After this, claims relating to each subsequent month should be submitted by day 14 of the following month (unless this falls on a weekend and then it is the next working day).

To apply you will need a Government Gateway user ID and password, which will have been given to you when you registered for PAYE online.

If you do not finish a claim in one session, you can save a draft, but it must be completed within seven days of starting it.

Businesses looking to make a claim can do so now via HMRC’s portal, by clicking here.

What do I need to make a claim?

To make a claim, you will need:

You also need to provide either:

If you’re claiming for employees that are flexibly furloughed, you’ll also need:

Will HMRC help me calculate my contributions to the scheme? 

Employers are responsible for calculating the correct amounts to claim from the scheme, with HMRC expected to take a hard line on errors that are not corrected quickly.

HMRC’s guidance walks employers through the various calculations needed to work out the amounts they need to claim in respect of furloughed employees.

If you’ve already claimed for an employee who was on furlough during October, and they are paid a fixed salary, you can follow the same usual wage calculation for claim periods after 31 October 2020.

The amount you should use when calculating 80 per cent of your employees’ wages for hours not worked, is made up of the regular payments you are obliged to make, including:

You cannot include the following when calculating wages:

The entirety of the grant received to cover an employee’s subsidised furlough pay must be paid as money and should be netted off to pay for the provision of benefits or a salary sacrifice scheme.

Where the employer provides benefits to furloughed employees, these benefits should be in addition to the wages that must be paid under the terms of the Job Retention Scheme.

Employees cannot switch freely out of most salary sacrifice schemes unless there is a life event. However, HMRC has confirmed that coronavirus counts as a life event that could warrant changes to salary sacrifice arrangements if the relevant employment contract is updated accordingly.

To help employers deal with the potentially wide range of permutations, HMRC has published example calculations in the guidance dealing with different situations. To read the latest guidance, please click here or to use the Government’s own calculator click here.

How soon will I receive the grant payment? 

Grants payments are anticipated within six working days of a new claim.

What happens if I overclaim for the CJRS?

If you receive an overpayment and you are making further claims, it is possible to offset the overpayment against the amount of your next claim (your new claim will be reduced and you’ll need to keep a record of the adjustment for six years).

If you do not intend to make another claim you must obtain a payment reference number and pay HMRC back within 30 days.

If you do not do this, you may have to pay a penalty and it will prevent any potential tax liability in respect of the overpayment of CJRS.

What can I do if I have underclaimed?

If you made an error in your claim that has resulted in you receiving a smaller grant, you must still pay your employees the correct amount and should contact HMRC on or before 30 November to amend your claim.

For claims relating to periods after 1 November 2020, you will only be able to increase the amount of your claim if you amend the claim within 28 calendar days after the month the claim relates to (unless this falls on a weekend and then it is the next working day).

Can I re-employ staff that were made redundant? 

Employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer afterwards can be re-employed and claimed for.

You must have made a PAYE RTI submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.

Similarly, an employee who was on a fixed-term contract, on payroll on 23 September, and that contract expired after 23 September can be re-employed and claimed for, provided that the other eligibility criteria are met.

Can I make an employee redundant or dismiss them while on furlough?

The Government is considering a change to the rules of the scheme from 1 December 2020 to prevent claims in respect of employees serving contractual or statutory notice periods. The outcome of this review will be set out in further guidance to be published before the end of November.

Will the Government share my data with anyone? 

From December onwards, HMRC will publish the names and registration numbers of limited companies and Limited Liability Partnerships (LLPs) that claim from the CJRS. This measure does not apply to claims relating to November or to other classes of employer.

How is the scheme applied to someone whose pay varies monthly? 

If the employee has been employed for a full 12 months prior to the claim, you can claim for the higher of either:

If the employee has been employed for less than a year, you can claim for an average of their monthly earnings since they started work.

As an employer, it is your responsibility to calculate how much of an employee’s salary you can claim for, including the amount of Employer National Insurance contributions and minimum automatic enrolment employer pension contributions.

Are employees returning from parental leave eligible? 

 Employees returning from statutory maternity and paternity leave in the next few months will remain eligible for furlough through the Coronavirus Job Retention Scheme (CJRS) as long as they meet the existing eligibility criteria.

However, employees who wish to return early from maternity leave to be furloughed with the agreement of their employer must give eight weeks’ notice.

Does the scheme apply to directors? 

 Yes, directors of a company can be furloughed. During this period directors should be careful to avoid anything that could be mistaken for work, including posting promotional material on their social media feeds on days where they are furloughed.

Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would be judged reasonably necessary.

This also applies to salaried individuals who are directors of their own Personal Service Company (PSC).

 An employee has indicated that they need to care for another and has asked to be furloughed, can they claim?

Employees can be furloughed where they are unable to work because they are shielding in line with public health guidance (or need to stay at home with someone who is shielding) or have caring responsibilities resulting from coronavirus, including employees that need to look after children

Can furlough be used as a substitute for sick pay?

The CJRS is not intended for short-term sickness absences. If, however, you want to furlough employees for business reasons and they are currently off sick, you are eligible to do so, as with other employees.

Furloughed employees who become ill, due to coronavirus or any other cause, must be paid at least Statutory Sick Pay (SSP).

It is up to employers to decide whether to move these employees onto SSP or to keep them on furlough, at their furloughed rate.

How should I inform employees that they are being furloughed?

You should discuss furlough with staff and make any changes to the employment contract by agreement. Remember the employment, equality and discrimination laws will apply in the usual way.

To be eligible for the grant, you must also have confirmed with the employee or reached a collective agreement with a trade union in writing that they have been furloughed or flexibly furloughed. The employee does not have to provide a written response.

You must keep a written record of the agreement for five years, as well as keeping records of how many hours employees work and the number of hours they are furloughed (for at least six years).

Can apprentices continue to train and be furloughed?

The CJRS allows staff members to undertake volunteer work outside of the business and take part in training courses. Apprentices can be furloughed like any other member of staff.

How is performance pay, such as tips and bonuses, calculated under the scheme? 

The CJRS does not cover performance-related pay, but you can voluntarily top up pay to reflect this.

Can agency staff and those on zero-hours contracts be furloughed?

Employees can be on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts to be eligible for the Coronavirus Job Retention Scheme, including where they are employed by umbrella companies.

Furlough should be agreed between the agency or umbrella company, as the deemed employer, and the worker.

How does the CJRS apply to maternity pay and shared parental leave?

Those who are contractually obliged to enhanced maternity, adoption or shared parental pay are eligible for the scheme, but not those on statutory maternity pay. They will be paid in the same way and cannot be additionally furloughed.

An employee has refused to be furloughed, what can I do?

In the majority of cases, it will be in the employees’ interest to accept an offer of furlough as it means that their role would otherwise be made redundant.

Employers have a variety of options open to them including reducing their working hours, reducing their pay, short-time working and layoffs and in some cases redundancy.

Remember that existing employment rules continue to apply so you must consider whether your actions could lead to a claim for unfair dismissal or discrimination.

How does the CJRS affect holiday pay?

Employees can take holiday whilst on furlough and they should be paid as normal. The Working Time Regulations (WTR) obligates employers to pay time taken as annual leave at the normal rate of pay or, where their rate of pay varies, calculated based on the average pay they received in the preceding 12 weeks.

The CJRS guidance confirms you can make a grant for an annual leave furlough day in the same way as any normal working day.

This would still be paid at 80 per cent of normal rates (capped at £2,500 per month) as you are in effect ‘topping up’ for those annual leave days by paying the difference between that and their normal pay.

Although furloughed employees are not working, they continue to accrue annual leave, as per the terms of their employment contract.

How are bank holidays accounted for?

Where staff are furloughed over a bank holiday period, and they usually take bank holidays as part of their holiday allowance, employers must pay them on top of their furlough for this. If staff usually work bank holidays this does not apply.

Is the CJRS taxable?

Grants from the various Government schemes to provide support during the coronavirus outbreak are taxable in the same way as other income.

You must also deduct and pay to HMRC Income Tax and employee National Insurance contributions on the full amount that you pay employees, including any scheme grant.

Here to Help 

If you require assistance with the extended CJRS we are here to help. To find out how our experienced team can help you submit a claim and comply with the rules of this support measure, please contact us.


Latest update – 9th November 2020

Government extends Furlough to March 2021

As the lockdown has now started for England and continues elsewhere, the Government has changed its mind again about business supports and decided to extend the Coronavirus Job Retention Scheme (CJRS) across all regions of the UK.

The Chancellor has announced that CJRS will be extended until the end of March 2021 for all parts of the UK. For claim periods running to 31 January 2021, the UK Government will pay 80% of employees’ usual wages for hours not worked, up to a cap of £2,500 per month. The UK Government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.

It was also confirmed that the Job Retention Bonus will no longer be paid in February 2021, as CJRS will be available at that time. An alternative retention incentive will be put in place at the appropriate time.

Please talk to us about getting Government support during these tough times. We are here to help and can work plans out with you.


Updated – 2nd November 2020

Coronavirus Job Retention Scheme (CJRS) Extension

The Coronavirus Job Retention Scheme (CJRS) has been extended, just hours before it had been due to close to be replaced by the new Job Support Scheme.

The extended CJRS will operate on similar terms to those in place in August 2020. CJRS grants will cover 80 per cent of a furloughed employee’s usual wages, capped at £2,500 a month, while employers will be required to cover employer National Insurance and pension contributions. They will not be required to contribute to employees’ wages, as had been required in September and October.

Flexible furlough arrangements will also be permitted under the extended scheme. This means furloughed employees will be able to work reduced hours, paid by their employer in full, while the employer can claim a CJRS grant in respect of 80 per cent of the pay for usual hours not worked.

Crucially, neither the employer nor the employee needs to have used the CJRS previously to use the extended scheme.  The scheme is open to all employees for whom a Real Time Information (RTI) submission had been made on or before 30 October 2020. Previously, the scheme had only been open for employees reported on an RTI submission on or before 19 March 2020 and who had been furloughed for at least three weeks before 1 July 2020.

The scheme will otherwise operate as it has done previously and will be open to employees on any type of contract. Employers will also be able to top-up employee wages above the value of CJRS grant if they wish to do so.

Employers will need to agree full furlough or flexible furlough arrangements with employees in accordance with employment law and their contracts of employment.

Full guidance on the extended scheme is expected to be published imminently.

The extension of the CJRS means that the introduction of the JSS Open and JSS Closed on 1 November has been postponed until the CJRS closes.

These arrangements apply to the whole of the UK.


Updated – 26th October 2020

Further updates – Job Support Scheme (JSS) Extension 

The new JSS is due to come into effect on 1 November 2020, once the previous furlough scheme comes to an end this month.

Originally it required employers to pay around a third of their employees’ wages for hours not worked and required employees to work at least 33 per cent of their normal hours.

In recognition of the difficulties businesses are facing, particularly in some adversely affected sectors, the JSS will now only require employers to make a five per cent financial contribution towards unworked hours, while the Government will contribute 61.67 per cent (capped at £1,541.75).

The latest change will also see the minimum hours requirements for employees cut to just 20 per cent of their regular working time.

As an example, under the new scheme if an employee is usually paid £600 for working 40 hours in a week, but their hours are cut by their employer to 20 per cent of their normal time (8 hours), they will be paid £120 for their time worked, plus £24 in employer contributions and £296 in Government support for the time not worked. This would mean that they still receive weekly gross pay of £440.

The Chancellor confirmed that the extended version of the JSS can still be used alongside the £1,000 Job Retention Bonus and did not affect the other elements of the JSS for businesses legally required to close, which cover around two-thirds of an employee’s wage.


HM Revenue & Customs publishes further details of the Job Support Scheme

HM Revenue & Customs (HMRC) has published further details of the Job Support Scheme (JSS), announced by the Chancellor during his Winter Economy Statement in Parliament on 24 September.

The JSS is intended to support businesses facing reduced demand over the winter as a result of the Coronavirus crisis, helping to keep employees in ‘viable’ jobs on short-time working.

The scheme will launch on 1 November 2020 – the day after the Coronavirus Job Retention Scheme (CJRS) closes – and will run for six months until the end of April 2021.

It will be open to all SMEs, but will only be available to large businesses that can show that they have been adversely affected by the Coronavirus crisis through reduced revenues. Large businesses will be expected not to make capital distributions, including dividends or share buybacks, while using the JSS.

Employees claimed for through the JSS must have been on an employer’s PAYE payroll on 23 September 2020, meaning their employer must have included them on an RTI submission on or before that date.

They cannot be on notice of redundancy or be made redundant while in receipt of the JSS.

Employees must work at least 33 per cent of their usual hours and be paid in full for those hours by their employer.

The employer must also then pay one-third of the hours not worked – an amount which will be matched by the Government up to a cap of £697.92 a month.

Employees will then forego pay for one-third of the usual hours that they are not working. This means they will be paid at least 77 per cent of their usual wages, even if they are only working 33 per cent of their usual hours.

Employers meanwhile, would pay a total of 55 per cent of an employee’s usual wages in return for 33 per cent of their usual hours.

Therefore, it could cost an employer less to dismiss two staff and keep one working full-time, rather than having three staff on short-time working through the JSS. The scheme has similar implications, even where employees are working a much larger proportion of their usual hours.

HMRC has published a table, setting out how the scheme will work at different levels of short-time working:

Hours Employee Worked 33 per cent 40 per cent 50 per cent 60 per cent 70 per cent
Hours Employee Not Working  67 per cent  60 per cent  50 per cent  40 per cent  30 per cent
Employee Earnings  78 per cent  80 per cent  83 per cent  87 per cent  90 per cent
Gov’t Grant  

22 per cent

 

20 per cent

 

17 per cent

 

13 per cent

 

10 per cent

Employer Cost  

55 per cent

 

60 per cent

 

67 per cent

 

73 per cent

 

80 per cent

Employers will need to agree short-time working arrangements with staff affected and make any necessary changes to contracts of employment, with documents made available to HMRC on request.

HMRC says that it intends to notify employees directly with full details of the claims made in respect of them.

Link: 

Job Support Scheme Factsheet


Updated – 21st September 2020

CJRS – HMRC makes changes to calculations for claims

HMRC has updated its guidance on how to perform usual hours calculations where employees come off furlough or flexible furlough partway through a claim period. The change affects claims made from 14 September.

HMRC has made changes for claims made from 14 September 2020. HMRC has added a new subheading:

“Calculating the number of working and furloughed hours for an employee that comes off furlough or flexible furlough partway through a claim period.”

The guidance states:

“If your employee stops being furloughed or flexibly furloughed partway through a claim period, when calculating the number of furloughed hours you can claim for, make sure you:

HMRC has stated that employers do not need to amend claims made prior to 14 September, but they should use this calculation for any claims from 14 September 2020, for an employee who stops being furloughed or flexibly furloughed partway through a claim period.

If we are making your claims we will make the calculation adjustments for post 14 September claims and if you are doing your own claims please see the web link below.

See: https://www.gov.uk/guidance/calculate-how-much-you-can-claim-using-the-coronavirus-job-retention-scheme#work-out-80-of-your-employees-usual-wage


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 – 2nd 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.