The Chancellor has this evening confirmed the following changes to the Coronavirus Job Retention Scheme (CJRS):
- Claims for periods after 30 June 2020 will only be possible from employers who have previously used the scheme in respect of employees they have previously furloughed for a 3 week period ending no later than 30 June – the latest an employee can be placed on furlough for the first time is therefore 10 June 2020. Employers will have until 31st July to make any claims in respect of the period to 30 June. (As yet there is no detail as to whether there will be an exception for TUPE transferees unable to comply with this deadline in respect of furloughed transferring employees.)
- Partial furlough will be possible from 1 July 2020, rather than August as originally announced. From 1 July, employers will be able to claim in respect of previously furloughed employees either for full furlough, or for partial furlough where employees work part of their normal hours. The employer must pay wages and employer NICs and pension contributions for the hours worked, and can make claims under the CJRS in respect of the normal hours not being worked. There is no restriction on the working hours or shift pattern but employers must agree the arrangement with their employee and confirm that agreement in writing. The minimum period for a claim will be a week (ie, the furlough arrangement agreed between employer and employee and reported in a claim to HMRC must cover a period of at least one week, although the claim could be in respect of wages for only part of a week where the employee is working part of their normal hours). Further details will be included in future guidance to be published on 12 June.
- For July, the CJRS grant will continue to cover 80% of wages for unworked hours (subject to the monthly cap of £2,500 or, for partial furlough, a proportionate cap reflecting the hours not worked), plus associated employer NICs and pension contributions.
- For August, employers must pay the employer NICs and pension contributions for the hours not worked; the CJRS grant will continue to cover 80% of wages subject to the cap.
- For September, employers must contribute 10% of the capped wages (plus employer NICs and pension contributions) with the government paying 70% of capped wages for the hours the employee does not work (so the employee continues to receive 80% wages subject to the cap).
- For October, the employer contribution increases to 20% (plus employer NICs and pension contributions) and the government contribution reduces to 60% of capped wages.
- Employers can continue to top up wages to 100% if they wish.
- The scheme will close on 31 October 2020.
We have updated our client briefing on the CJRS to cover these changes, available here.