In case you are unaware, I’ve just received these updates from our accountant.
For employees:
1. Part time furloughing
From 1 July 2020, businesses using the scheme will have the flexibility to bring previously furloughed employees back to work part time – with the government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August.
Employers will decide the hours and shift patterns employees will work on their return, and will be responsible for paying their wages in full while working.
Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, they will need to report and claim for a minimum period of a week. They can choose to make claims for longer periods such as on monthly or two weekly cycles if preferred. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.
If employees are unable to return to work, or employers do not have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules.
2. Employer contributions
From August, the government grant provided through the job retention scheme will be slowly tapered.
Around a quarter of CJRS monthly claims relate to wages that are below the threshold where employer NICs and auto enrolment contributions are due, and so no employer contribution will be required for these furloughed employees in August.
3. Important dates
It’s important to note that the scheme will close to new entrants from 30 June 2020. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June 2020.
This means that the final date by which an employer can furlough an employee for the first time will be 10 June 2020 for the current three-week furlough period to be completed by 30 June 2020.
Employers will have until 31 July 2020 to make any claims in respect of the period to 30June.
End date. The Chancellor has confirmed that the CJRS will close on 31 October 2020.
For the Self Employed:
The government has announced that the self-employed will receive another grant to cover June, July and August if their business has been affected by coronavirus.
Who can get the grant? Self-employed individuals or members of a partnership are eligible for a grant representing up to 70% of your average profits if you meet the following criteria:
Applications for this second and final grant will open in August. We will contact you again nearer the time once we have the exact details.
Can you still apply for the first grant? Yes, individuals can continue to apply for the first grant until 13 July 2020.
Can you apply for the second grant even if you haven’t claimed the first grant? Yes, you don’t need to have claimed the first grant to receive the second grant, for example, if your business has only recently been affected by coronavirus.
Unfortunately, the guidance states that accountants are not permitted to submit claims for grants on behalf of our clients. Therefore, you will need to submit your own claims online via your own personal Government Gateway account.
This is not optional and you must have a personal online Government Gateway Account to submit a claim.
For employees:
1. Part time furloughing
From 1 July 2020, businesses using the scheme will have the flexibility to bring previously furloughed employees back to work part time – with the government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August.
Employers will decide the hours and shift patterns employees will work on their return, and will be responsible for paying their wages in full while working.
Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, they will need to report and claim for a minimum period of a week. They can choose to make claims for longer periods such as on monthly or two weekly cycles if preferred. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.
If employees are unable to return to work, or employers do not have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules.
2. Employer contributions
From August, the government grant provided through the job retention scheme will be slowly tapered.
- in June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance and pension contributions for the hours the employee doesn’t work – employers will have to pay employees for the hours they work
- in August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay Employer NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed
- in September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay Employer NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500
- in October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay Employer NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500
- the cap on the furlough grant will be proportional to the hours not worked.
Around a quarter of CJRS monthly claims relate to wages that are below the threshold where employer NICs and auto enrolment contributions are due, and so no employer contribution will be required for these furloughed employees in August.
3. Important dates
It’s important to note that the scheme will close to new entrants from 30 June 2020. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June 2020.
This means that the final date by which an employer can furlough an employee for the first time will be 10 June 2020 for the current three-week furlough period to be completed by 30 June 2020.
Employers will have until 31 July 2020 to make any claims in respect of the period to 30June.
End date. The Chancellor has confirmed that the CJRS will close on 31 October 2020.
For the Self Employed:
The government has announced that the self-employed will receive another grant to cover June, July and August if their business has been affected by coronavirus.
Who can get the grant? Self-employed individuals or members of a partnership are eligible for a grant representing up to 70% of your average profits if you meet the following criteria:
- Submitted a tax return for 2018/19
- Business traded during 2019/20
- Business is continuing to trade, or would be except for coronavirus
- Intend to continue trading in 2020/21
- Have lost trading/partnership trading profits due to coronavirus
- Trading profits were less than £50,000 and represented more than half of their total taxable income.
Applications for this second and final grant will open in August. We will contact you again nearer the time once we have the exact details.
Can you still apply for the first grant? Yes, individuals can continue to apply for the first grant until 13 July 2020.
Can you apply for the second grant even if you haven’t claimed the first grant? Yes, you don’t need to have claimed the first grant to receive the second grant, for example, if your business has only recently been affected by coronavirus.
Unfortunately, the guidance states that accountants are not permitted to submit claims for grants on behalf of our clients. Therefore, you will need to submit your own claims online via your own personal Government Gateway account.
This is not optional and you must have a personal online Government Gateway Account to submit a claim.
