CJRS Update – 12 June 2020

On 12 June 2020, HMRC updated their guidance on the Coronavirus Job Retention Scheme (CJRS). The following information is a summary of some of the key points our clients might come across, but employers should read the guidance and make sure it is understood to ensure claims are valid. The detailed guidance can be found here:

https://www.gov.uk/guidance/calculate-how-much-you-can-claim-using-the-coronavirus-job-retention-scheme

Some of the key points:

• The Coronavirus Job Retention Scheme will close on 31 October 2020
• The first time you will be able to make a claim for days in July 2020 will be 1 July 2020
• 31 July 2020 is the last day that you can submit claims for periods ending on or before 30 June 2020
• Employers must make at least one claim before 30 June 2020
• From 1 July 2020, the number of employees an employer can claim for in any claim period cannot exceed the maximum number they have claimed for under any previous claim
• From 1 August 2020, the level of grant will be reduced each month as per our previous blog

https://jsca.co.uk/changes-to-the-coronavirus-job-retention-scheme/

• From 1 July 2020, the scheme rules will change each month. This means that claim periods starting on or after 1 July 2020 must start and end within the same calendar month.
• Separate claims will need to be submitted to cover the days in June 2020 and the days in July 2020 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.
• If your pay period includes days in more than one month, you will need to submit separate claims covering the days that fall into each month. You should calculate each of those claims separately. For example, if an employee has a weekly pay period which ends each Friday for their pay period 27 June to 3 July 2020 the employer will need to submit two separate claims. Or an if an employee has a 4-week pay period which falls 20 July to 16 August 2020, the employer cannot claim for this as a single period so makes two separate claims: 20 July to 31 July 2020 and 1 August to 16 August 2020.
• Claim periods must last at least 7 days unless you are claiming for the first few days or the last few days in a month

Flexible Furlough

• From 1 July 2020, employers can bring furloughed employees who have been furloughed for at least three consecutive weeks between 1 March and 30 June 2020 back to work for any amount of time and any shift pattern, while still being able to claim the CJRS grant for the hours not worked
• Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 70% of the £2,500 cap if they are placed on furlough for 70% of their usual hours
• When claiming for employees who are flexibly furloughed you should not claim until you are sure of the exact number of hours they will have worked during the claim period
• If you claim in advance and your employee works for more hours, then you will have to pay some of the grant back to HMRC
• If your employee is flexibly furloughed from 1 July 2020, you will need to work out your employee’s usual hours and record the actual hours they work as well as their furloughed hours for each claim period

Examples and information of how to calculate the usual hours can be found here

https://www.gov.uk/government/publications/find-examples-to-help-you-work-out-80-of-your-employees-wages/examples-of-how-to-work-out-80-of-your-employees-wages-national-insurance-contributions-and-pension-contributions#example1

• From 1 July 2020, agreed flexible furlough agreements can last any amount of time. Employees can enter into a flexible furlough agreement more than once
• Where a previously furloughed employee starts a new furlough period before 1 July 2020 this furlough period must be for a minimum of 3 consecutive weeks. This is the case regardless of whether the 3 consecutive week minimum period ends before or after 1 July 2020. For example, a previously furloughed employee can start a new furlough period on 22 June 2020 which would have to continue for at least 3 consecutive weeks ending on or after 12 July 2020. After this the employee can they can then be flexibly furloughed for any period
• If you flexibly furlough employees, you’ll need to agree this with the employee (or reach collective agreement with a trade union) and keep a new written agreement that confirms the new furlough arrangement. You’ll need to:
  • make sure that the agreement is consistent with employment, equality and discrimination laws
  • keep a written record of the agreement for five years
  • keep records of how many hours your employees work and the number of hours they are furloughed (i.e. not working)

The information in this blog provides only an overview of HMRC guidance and legislation in force at the date of publication and no action should be taken without consulting the detailed HMRC guidance and legislation or seeking professional advice.  Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this blog can be accepted by the firm.

Photo by Danielle Rice on Unsplash