You will have received our previous updates relating to the changes to the Corona Job Retention Scheme (CJRS), furlough leave and now flexible furlough. As you probably know, the flexible furlough scheme starts today 1st July 2020. Please also refer to our previous update on 11th June 2020 which sets out clarification which also relates to this guidance.
Just to clarify:
- The minimum 3-week furlough period is gone, you can furlough for any periods of time – hours, days, part-days, weeks or months – as agreed with your employees.
- Under the flexible furlough scheme, employees no longer need to avoid doing any work for the employer but can work for some of the week and be furloughed for the rest, in proportions decided between employee and employer.
- Broadly, from 1 July, employers will claim a pro-rata’d amount of 80% of salary, based on the proportion of hours not worked out of normal working hours. To calculate the normal working hours for those with fixed hours/pay, you simply take the number of hours worked in the pay period before 19 March 2020. To calculate the normal working hours for those with variable pay, you take the higher of (a) the average number of hours worked in the tax year 2019 to 2020 or (b) the corresponding calendar period in the tax year 2019 to 2020.
- There is no minimum period, although any claim through the CJRS portal must be in respect of a minimum one week period (i.e. employers can only put in four claims a month, not 31, although most will make one monthly claim)
A recap on 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
Please note that employEEs continue to receive 80% of salary (capped at £2,500 per month) and employERs must continue to pay this even though the grant from the Government is reducing.
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 and we have drafted a Flexible Furlough Agreement to assist you with this. Please subscribe to our Advice Line for access to this.
- 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. We have produced a tracker spreadsheet which you will find in the same Advice Line Dropbox folder and will help you, and your payroll provider, know what to pay employees and what to reclaim from HMRC
If you really want to, you can find further detailed guidance at the following links:
(1) Check if you can claim (original employer guidance doc – now version 14) – UPDATED (https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
(2) Check which employees you can put on furlough guidance doc – UPDATED (https://www.gov.uk/guidance/check-which-employees-you-can-put-on-furlough-to-use-the-coronavirus-job-retention-scheme)
(3) Steps to take before calculating your claim using the CJRS – NEW (https://www.gov.uk/guidance/steps-to-take-before-calculating-your-claim-using-the-coronavirus-job-retention-scheme)
(4) Calculate how much you should claim – NEW (https://www.gov.uk/guidance/calculate-how-much-you-can-claim-using-the-coronavirus-job-retention-scheme)
(5) Claim for your employees’ wages online – UPDATED (https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme)
(6) Report a payment in PAYE RTI – UPDATED (https://www.gov.uk/guidance/reporting-payments-in-paye-real-time-information-from-the-coronavirus-job-retention-scheme)
(7) Part-furlough worked example – NEW: (https://www.gov.uk/government/publications/find-examples-to-help-you-work-out-80-of-your-employees-wages/example-of-a-full-calculation-for-an-employee-who-is-flexibly-furloughed)
(8) Long list of worked examples – UPDATED (https://www.gov.uk/government/publications/find-examples-to-help-you-work-out-80-of-your-employees-wages?utm_source=b473fe86-d0d2-4a06-ba3e-2ebd8272ce07&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate)
Guidance and support
We are constantly updating and adding to our Coronavirus Dropbox. Please subscribe to our Advice Line for access to this.
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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.
