As you will be aware by now, on Wednesday the Chancellor announced that the CJRS, the Furlough Leave support scheme, due to end on 30th April 2021, would be extended until 30th September 2021. This is good news for business, giving a further breathing space and financial support as we (hopefully) ease out of lockdown and get back to business. However, there are some other changes you need to be aware of and factor in:
- Employees on furlough must continue to receive 80% of salary for hours they are furloughed and not working for the organisation.
- Furlough continues to be flexible, meaning that employees will be able work when you need them and can be furloughed for any hours/days/weeks when you do not have work for them to do. Very useful as it means that they could, potentially, work even just a few hours a day and be furloughed for the rest of the working day or work some days in the week and be furloughed for the remainder.
- The CJRS grants to employers will continue at the current 80% rate but only until the 30th June 2021, thereafter the grant will reduce with employers meeting a greater percentage of the furlough cost as follows:
- For July the grant will reduce to 70% with employers meeting 10% of the cost.
- For August and September, the grant will reduce to 60% with employers meeting 20% of the cost.
- This is in addition to meeting the Employer’s NI and pension contributions.
Some points for you to consider in your people planning:
- Whilst you cannot furlough an employee in order for them to take holiday, employees can take holiday whilst on furlough. This will have the benefit of reducing the cost of the holiday to you and ensure that you have your team in place and ready for work later in the year rather than them having holiday to take on their return.
Some considerations:
- If you have employees on holiday whilst on furlough you must top up their pay to 100%
- We suggest that, if you have employees on furlough, you make sure that they take at least some (or we would suggest a good proportion) of their annual leave before returning to work.
- If employees are flexible furloughed, you could get them to take holiday on furloughed days.
- In some cases you may need to issue notice to employees to do this and you can access this by signing up for our Advice Line Service.
- Making the grant claim and maintaining records
- HMRC will spend the next 7 years conducting audits in relation to CJRS grant claims made by employers so do make sure that you have accurate, complete and accessible records and keep them for at least 7 years!
- You must maintain monthly records for each employee of hours worked and hours furloughed to support your CJRS grant submission to HMRC.
- You can find a template spreadsheet by signing up for our Advice Line Service.
- You must have a written Furlough Leave Agreement in place with each employee who is furloughed.
- You can find a template by signing up for our Advice Line Service.
- HMRC will spend the next 7 years conducting audits in relation to CJRS grant claims made by employers so do make sure that you have accurate, complete and accessible records and keep them for at least 7 years!
- What about redundancies?
- If the job role will not be viable going forward you can make positions redundant during furlough.
- Employees on furlough can be consulted with for redundancy and, if appropriate following full consultation (ask us for support with this if you are going to do so) notice can be issued.Some considerations:
- You cannot claim the CJRS grant for employees on notice.
- Notice is payable at 100%.
- Holiday is accrued up to the end of the notice period, but you can give notice for it to be taken during the notice period so that you are not incurring additional cost
- Employees on furlough can be consulted with for redundancy and, if appropriate following full consultation (ask us for support with this if you are going to do so) notice can be issued.Some considerations:
- If the job role will not be viable going forward you can make positions redundant during furlough.
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We are constantly updating and adding to our Coronavirus Dropbox. Support for getting your business going is available via our Advice Line service.
Please note, this briefing is accurate at the time of writing and intended as guidance, it is subject to change as the COVID-19 and Government advice changes; it is not intended to replace advice so please do call us if you have any queries.