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Accessing support through the Coronavirus Job Retention Scheme

The Chancellor announced measures to support existing jobs and encourage job creation. The current Coronavirus Job Retention Scheme will also end in October. Employers should now consider how they can bring their workforce back. 

Last updated 19 August 2020

As part of the set of temporary measures aimed at supporting businesses during the current unprecedented situation, the Chancellor recently announced the introduction of a more flexible furlough scheme. The guidance has now been updated further and can be seen here.

Employers can agree a return to work with their furloughed employees on a part-time basis. The flexible scheme will continue until the end of October alongside the present furlough scheme. For the days that the employee works, their employers will pay them at 100% of their normal wage; for the other days in the week, the employee will receive the furlough payments as detailed below.

The part-time furlough scheme will be open only to those who are already using the furlough scheme. It is designed to ease back to work those already furloughed.

In August, the existing furlough payments continue to operate, i.e. the government will pay 80% of the gross 'wage costs' for each eligible worker up to a maximum of £2,500 per month. Employers are now required to start paying National Insurance Contributions and pension auto enrolment contributions of furloughed employees. They can no longer claim this amount under the furlough scheme.

In September, employers will continue to pay the above contributions and will also be required to pay 10% of wages with the government contributing 70% of wages up to a cap of £2,190.

For October, employers will be required to pay 20% of wages with the government contributing 60% of wages up to a cap of £1,875.

The scheme will then end.

The HMRC online portal should continue to be used to submit grant claims in respect of furloughed employees.

The Chancellor has said that there will not be any specific tapering for individual sectors and that the furlough scheme will end in October. 

Unless an employer is making a new claim for an employee who is a military reservist, or is returning from statutory parental leave, a claim can now only be made if:

  • The employee has previously been furloughed for three consecutive weeks between 1 March and 30 June, and
  • A claim was submitted before 31 July

Qualifying criteria

The grant continues to apply to employers of all sizes across all sectors, including the not-for-profit.

The scheme was open to all UK employers that had created and started a PAYE payroll scheme on or before 19 March 2020. An employer could only claim for furloughed employees who were on their PAYE payroll on or before 19 March 2020 and who were notified to HMRC on an RTI submission on or before 19 March 2020. Employees can be on any type of contract, including: full-time, part-time, agency contracts, apprentices and flexible or zero-hour contracts. Foreign nationals are eligible to be furloughed.

In a situation where either the TUPE or PAYE business succession rules applied to a change in ownership, a new employer could claim the grant in respect of employees of a previous business transferred after 19 March 2020.

More employee considerations

  • The position of employees made redundant since 28 February 2020 was covered providing the employer rehired them, however, new employees hired after 19 March 2020 could not be furloughed or claimed for in accordance with the Job Retention Scheme.
  • If an employee has more than one employer, they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually.
  • Consultation with employees is essential as is the need to obtain an employee’s written agreement to their continuation of being furloughed. 
  • Consultation should also take place when bringing employees back to work either on a part-time or full-time basis. Appropriate written confirmation will also be required.

Steps to take now

We will continue to publish further information as it is announced. As an employer there are some steps you should be taking now, these include:

  • Reviewing your cash flow situation.
  • Identifying which employees you wish to return to part-time or full-time working and your reasoning behind this decision.
  • Undertaking appropriate consultation and ensuring that employment documentation is updated.

How much can be claimed?

  • Employers can claim for their wage costs which includes regular payments they are required to pay their employees. Such payments include wages, past overtime, fees and compulsory commission payments.  However, discretionary bonus (including tips) and commission payments and non-cash payments should not be included in the calculation.
  • In addition, the associated Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions on the wage claimed could only be claimed up to 31 July 2020.

Keep channels of communication as open as possible with your employees during this unsettling time, as the health and wellbeing of your employees will be your first concern.

Recent advice provides more detail about how the scheme rules apply to different employment categories. For instance it refers to employees who are shielding, employees with caring responsibilities, office holders, company directors and salaried members of Limited Liability Partnerships.

It also covers employees falling sick whilst furloughed, salary sacrifice matters, annual leave arrangements, employees returning to work after being on statutory leave and some payroll issues.

For further information, read the government guides below

  • For information on how to calculate claims, click here.
  • To read the step by step guide for employers, click here.
  • To claim for wages, click here.
  • For details of scheme changes from 1 July, click here
  • To register to watch government webinars or YouTube videos, click here.

About the author

Doug Farrow

+44 (0)20 7556 1453
farrowd@buzzacott.co.uk

Last updated 19 August 2020

As part of the set of temporary measures aimed at supporting businesses during the current unprecedented situation, the Chancellor recently announced the introduction of a more flexible furlough scheme. The guidance has now been updated further and can be seen here.

Employers can agree a return to work with their furloughed employees on a part-time basis. The flexible scheme will continue until the end of October alongside the present furlough scheme. For the days that the employee works, their employers will pay them at 100% of their normal wage; for the other days in the week, the employee will receive the furlough payments as detailed below.

The part-time furlough scheme will be open only to those who are already using the furlough scheme. It is designed to ease back to work those already furloughed.

In August, the existing furlough payments continue to operate, i.e. the government will pay 80% of the gross 'wage costs' for each eligible worker up to a maximum of £2,500 per month. Employers are now required to start paying National Insurance Contributions and pension auto enrolment contributions of furloughed employees. They can no longer claim this amount under the furlough scheme.

In September, employers will continue to pay the above contributions and will also be required to pay 10% of wages with the government contributing 70% of wages up to a cap of £2,190.

For October, employers will be required to pay 20% of wages with the government contributing 60% of wages up to a cap of £1,875.

The scheme will then end.

The HMRC online portal should continue to be used to submit grant claims in respect of furloughed employees.

The Chancellor has said that there will not be any specific tapering for individual sectors and that the furlough scheme will end in October. 

Unless an employer is making a new claim for an employee who is a military reservist, or is returning from statutory parental leave, a claim can now only be made if:

  • The employee has previously been furloughed for three consecutive weeks between 1 March and 30 June, and
  • A claim was submitted before 31 July

Qualifying criteria

The grant continues to apply to employers of all sizes across all sectors, including the not-for-profit.

The scheme was open to all UK employers that had created and started a PAYE payroll scheme on or before 19 March 2020. An employer could only claim for furloughed employees who were on their PAYE payroll on or before 19 March 2020 and who were notified to HMRC on an RTI submission on or before 19 March 2020. Employees can be on any type of contract, including: full-time, part-time, agency contracts, apprentices and flexible or zero-hour contracts. Foreign nationals are eligible to be furloughed.

In a situation where either the TUPE or PAYE business succession rules applied to a change in ownership, a new employer could claim the grant in respect of employees of a previous business transferred after 19 March 2020.

More employee considerations

  • The position of employees made redundant since 28 February 2020 was covered providing the employer rehired them, however, new employees hired after 19 March 2020 could not be furloughed or claimed for in accordance with the Job Retention Scheme.
  • If an employee has more than one employer, they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually.
  • Consultation with employees is essential as is the need to obtain an employee’s written agreement to their continuation of being furloughed. 
  • Consultation should also take place when bringing employees back to work either on a part-time or full-time basis. Appropriate written confirmation will also be required.

Steps to take now

We will continue to publish further information as it is announced. As an employer there are some steps you should be taking now, these include:

  • Reviewing your cash flow situation.
  • Identifying which employees you wish to return to part-time or full-time working and your reasoning behind this decision.
  • Undertaking appropriate consultation and ensuring that employment documentation is updated.

How much can be claimed?

  • Employers can claim for their wage costs which includes regular payments they are required to pay their employees. Such payments include wages, past overtime, fees and compulsory commission payments.  However, discretionary bonus (including tips) and commission payments and non-cash payments should not be included in the calculation.
  • In addition, the associated Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions on the wage claimed could only be claimed up to 31 July 2020.

Keep channels of communication as open as possible with your employees during this unsettling time, as the health and wellbeing of your employees will be your first concern.

Recent advice provides more detail about how the scheme rules apply to different employment categories. For instance it refers to employees who are shielding, employees with caring responsibilities, office holders, company directors and salaried members of Limited Liability Partnerships.

It also covers employees falling sick whilst furloughed, salary sacrifice matters, annual leave arrangements, employees returning to work after being on statutory leave and some payroll issues.

For further information, read the government guides below

  • For information on how to calculate claims, click here.
  • To read the step by step guide for employers, click here.
  • To claim for wages, click here.
  • For details of scheme changes from 1 July, click here
  • To register to watch government webinars or YouTube videos, click here.
Speak to an expert

For further advice and support for employers, on this topic or any other HR matters please contact Doug Farrow on +44 (0)20 7556 1453.

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