The Government’s Coronavirus Job Retention Scheme (CJRS) is changing next month.

Launched in March, the scheme allows employers to claim for a cash grant of up to 80% of a furloughed employee’s wages, capped at £2,500 a month.

Changes to the furlough scheme

The Chancellor Rishi Sunak recently announced changes to the scheme, including giving businesses the flexibility to bring furloughed staff back part-time from 1 July 2020. Individual firms will decide the hours and shift patterns their employees work, and will be responsible for paying their wages while in work.

Meanwhile, companies will still be able to claim for the CJRS grant for the normal hours their staff haven’t worked. When claiming for furloughed hours, businesses will need to report and claim for a minimum period of a week.

Closure to new entrants

The job retention scheme will close to new entrants from 30 June. From this point, employers will only be able to furlough staff they have furloughed for a full three-week period prior to 30 June.

This means the final date by which a firm needs to agree with their employee and ensure they place them on furlough is 10 June. Businesses will have until 31 July to make any claims in respect of the period to 30 June.

Further guidance on flexible furloughing and how employers should calculate claims will be published on 12 June.

Who has the initiative helped?

As of midnight on 24 May, the Coronavirus Job Retention Scheme had been used by 1 million employers to protect around 8.4 million jobs. The total value of claims made was £15 billion.

Scheme extension

The Chancellor has announced the furlough scheme will continue until the end of October, but with several changes, as follows:

  • In June and July, the Government will pay 80% of wages up to a cap of £2,500, as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything
  • In August, the Government will pay 80% of wages up to a cap of £2,500, but the employers will pay ER NICs and pension contributions
  • In September, the Government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions, and 10% of wages to make up the 80% total, up to a cap of £2,500
  • In October, the Government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up the 80% total, up to a cap of £2,500

What else?

As with the original scheme, businesses are still able to choose to top up their workers’ wages above the CJRS grant at their own expense.
And there will be further guidance published on 12 June in relation to flexible furloughing and how companies should calculate claims.

Support for frontline workers

If you’re a frontline worker, our team of tax experts at Churchill Taxation are offering you a free consultation to discuss any tax issues you might have. This is our way of saying thank you for keeping our nation safe and fed throughout the Covid-19 crisis.

We can help you whether you have a query with a coding notice or a more general tax issue. Please send an email to stephanie.churchill@churchilltaxation.co.uk and one of our team will be in touch.

Tax advice for small businesses

If you’re a small business owner, you will have found yourself dealing with a new set of challenges because of the pandemic.

At Churchill Taxation, our experienced tax advisers are staying up to speed with the rapid changes firms like yours are facing.

We can help you make sense of your business tax and prevent you from falling foul of HMRC rules.

Call us today on 07813 434195 or send an email to stephanie.churchill@churchilltaxation.co.uk