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Coronavirus Job Retention Scheme – Future pathway

Coronavirus Job Retention Scheme – Future pathway

17th June 2020 - Published by Kuits employment team

On 12 June 2020, HM Revenue and Customs published an update to the Coronavirus Job Retention Scheme (CJRS) laying out how it will change between July and October, allowing for a more flexible approach to furlough.

Key dates of changes to the furlough scheme

July

From July 1 employers will only be able to furlough employees who have been furloughed for at least three weeks prior to this date, meaning the cut-off date for furloughing a new employee was June 10. There is an exception to this, which is that the cut of date does not apply to employees returning from family-related leave, i.e. maternity and paternity leave etc, as long as the employer has already used the CJRS for other employees.

Employers will also be able to make flexible furlough arrangements with their employees, allowing staff to return to work on a part-time basis and still claim on the CJRS for the hours not worked. For all hours worked, employees will have to be paid in full, however for those hours not worked the employee can still receive 80%, subject to the cap.

A significant change is that the minimum furlough period of three weeks will no longer apply. However, any claim made through the CJRS portal must be in respect of a minimum of a one week.

Any new arrangements regarding flexible furlough MUST be agreed in writing between the employer and employee. This written record must be kept for a period of at least five years.

August

The CJRS will begin to wind down from August when National Insurance and employer pension contributions in respect of furlough pay will need to be covered by the employer.

September

From September the CJRS will grant a lower contribution to wages of 70% (capped at £2,187.50), however the employer has to top this up by 10%.

October

In October the CJRS funding will drop to 60% (capped at £1,875), with the employer’s contribution rising to 20%.

Calculating a claim to the furlough scheme

Although seemingly straightforward, the new rules make calculating furlough claims more complicated. HMRC has issued guidance on the steps that need to be taken before making a claim as well as how to calculate claims. Some worked examples can be found on the HMRC website by clicking HERE.

Get in touch with an employment solicitor in Manchester

To speak to an employment lawyer about the scheme, or if you are considering redundancies or restructuring within your business, contact Kevin McKenna on 0161 838 7851 or email kevinmckenna@kuits.com.

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