You will have received our recent updates relating to the changes to the Corona Job Retention Scheme (CJRS) and furlough leave. We now have some more information relating to the Flexible Furlough Scheme which starts on 1st July 2020.
Just to clarify:
- If your employee isn’t already on Furlough Leave or hasn’t been on a period of Furlough Leave previously then it’s too late as the last date to commence Furlough Leave was yesterday (10th June 2020).
- All claims for the grant need to be registered with HMRC by 31st July 2020
- If your employee has completed a period of Furlough Leave (of no less than 3 weeks) between 1st March and 30th June 2020 you will be able to take advantage of the Flexible Furlough Scheme which commences on 1st July 2020.
- With effect from 1st July there will be no minimum furlough leave period (up to 30th June it’s 3 weeks) but arrangements with employees and reporting to periods for HMRC will be in periods of 1 week (you don’t have to make a weekly claim, just show weekly periods when making a claim)
- Employers can claim the grant, at the prevailing rate, for the hours their employees are not working calculated by reference to their usual hours worked in a claim period. We don’t know quite how you will report this (presumably via the HMRC portal) and we await further details in future guidance which we are hoping will be published on 12th
- Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period and the number of hours they actually worked plus the number of furlough (i.e. non-working) hours.
- For worked hours, employees will be paid by their employer subject to their employment contract (i.e. 100% of normal pay) and employers will be responsible for paying the tax and National Insurance Contributions (NICs) due on those amounts, in other words you will pay the employee full pay for the hours they actually work.
- Employees must receive a minimum of 80% (capped at £2,500 per month) for furloughed hours. As the grant reduces, so the employer will have to top up the furlough pay to this rate.
- Further guidance on flexible furloughing and how employers should calculate claims will (hopefully) be published on 12 June.
What’s happening with the grant?
- From 1st August 2020 will be required to pay Employer NICs and pension contributions
- In September the grant will reduce to 70% capped at £2,190 per month
- In October the grant will reduce to 60% capped at £1875 per month
- 31st October 2020 the scheme closes
What do you need to do to take advantage of the Flexible Furlough Scheme?
- You will need to put in writing what you have agreed with your employees in relation to their adjusted working hours
- Keep a record of the number hours the employee works and the number of hours for which they are furloughed in each week; you will need this to make a claim to HMRC.
Guidance and support
We are constantly updating and adding to our Coronavirus Dropbox. Support for getting your business going is available by signing up for our Advice Line service.
Sadly, a number of our clients are having to make redundancies and we are here to support you with that process to minimise the risks of not following the correct procedures. Please do call or email us for advice and support on this or any other matter.
