Coronavirus Job Retention Scheme (furlough)

From 01 July 2020 the CJRS is moving into a phase  designed to get things moving again. The first stage of the process is to introduce a more flexible way of working designed to get business up and running again as well as to allow it to react to the current economic climate. 

From 01 August the scheme will then start to reduce the amount of support businesses are entitled to so to as to reduce reliance on the scheme. On Wednesday the Government has also issued new guidance on the scheme which can be found at

https://www.gov.uk/government/publications/changes-to-the-coronavirus-job-retention-scheme/changes-to-the-coronavirus-job-retention-scheme

https://www.gov.uk/guidance/steps-to-take-before-calculating-your-claim-using-the-coronavirus-job-retention-scheme?utm_source=8f006c27-4f6f-453f-910d-11535f9f0838&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

Claim periods

There is no maximum length for claim periods that end on or before 30 June, but any period that started before 30 June must end on that date. It is important to note that employers will only have until 31 July to claim for any periods ended 30 June. 

From 01 July onwards any claim period 

• must begin and end within the same calendar month 
• Be for no less than 7  days (unless for a period at the beginning or end of the month and the period claimed includes the first or last day of the month)

Reducing support

The first aspect to note is that whilst employee entitlement under the scheme is scheduled to stay at 80%, the government are reducing the support to which employers are entitled from the ability to recover the full 80% full support down to 60% in October. In addition, the support for employers NIC and Pension contributions will be removed from August.  Whilst the guidance provides more details this is summarised in a table below.

	July	August	September	October
Government contribution: employer NICs and pension contributions	Yes	No	No	No
Government contribution: wages	80% up to £2,500	80% up to £2,500	70% up to £2,187.50	60% up to £1,875
Employer contribution: employer NICs and pension contributions	No	Yes	Yes	Yes
Employer contribution: wages	–	–	10% up to £312.50	20% up to £625
Employee receives	80% up to £2,500 per month	80% up to £2,500 per month	80% up to £2,500 per month	80% up to £2,500 per month

Reporting Fraud

HMRC have also set up a fraud reporting hotline in relation to the Job Retention Scheme, Self-Employment Income Support Scheme and Statutory Sick Pay support for employers. Whistleblowers will be able to anonymously report suspected breaches including where an employer;

• Requires an employee to work when furloughed
• is claiming for employees who are at work
• makes a backdated claim that includes times when an employee was working

In Conclusion

This advice is general in nature and will need to be tailored to any one particular situation. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate.