Although the scheme will close on 31 October 2020, there are various changes over the coming months, starting from 1 July. There are no changes to the amount of grant that can be claimed in relation to June, however, no claim can be made in relation to any employee who has not completed a full three week furlough by 30 June. In addition it should be noted that 31 July is the last day that you can submit claims for periods ending on or before 30 June.
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.
Separate claims will need to be submitted to cover the days in June and the days in July that you want to claim for, even if employees are furloughed continuously. This may mean that your claim periods will differ from the pay periods you use.
Claim periods on or after 1 July must start and end within the same calendar month and must last at least 7 days unless you’re claiming for the first few days or the last few days in a month e.g. your pay period ends on 27th of the month and you then claim for the residual 3 days in that calendar month. This ensures that as the amount and format of grant claim changes, the cut off period is clear.
What are the changes in the amount of grant claim?
From 1 July, employers can bring furloughed employees back to work for any amount of time and any shift pattern and still claim the CJRS grant for the hours when the employee is not working. This enables employers to bring individuals back on a part-time basis as their business comes out of lock-down.
From 1 August 2020, the level of grant will be reduced each month.
• From 1 August, the government will pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough. Employers will be required to pay ER NICs and pension contributions for the hours the employee is on furlough.
• From 1 September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
• From 1 October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours.
Employers will continue to able to choose to top up employee wages above the 80% total and £2,500 cap for the hours not worked at their own expense if they wish. Employers will have to pay their employees for the hours worked.
How do the calculations differ from 1 July onwards?
The guidance covers many different scenarios and examples have been given in the link to ‘Examples of how to calculate your employee’s wages, National Insurance contributions and pension contributions’. This covers the situation for fixed and variably paid employees. The new approach in overview requires that the calculation works out the number of hours worked vs the number of hours an employee would normally work.
The guidance also provides examples and a further link to how to deal with pay periods which straddle June and July.
When claiming for employees who are flexibly furloughed under the new part-time rules from 1 July, employers are advised that they should not claim until they are sure of the exact number of hours that will have been worked during the claim period. However, if a claim is made in advance and an employee works for more hours than have been used to calculate the claim, you will have to pay some of the grant back to HMRC. It would appear that certainty would be advisable to avoid having to amend previous claims.
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