Pay Less Tax – Summer 2024 Edition
On Friday 12 June the government detailed the changes being made to the Coronavirus Job Retention Scheme (CJRS). We have summarised the main points below:
As has previously been the case, for June and July, the government will pay 80% of wages up to a cap of £2,500 for the hours the employee is on furlough, as well as employer National Insurance Contributions (ER NICS) and pension contributions for the hours the employee is on furlough.
From 1 July 2020, the furlough scheme will only be available to employers that have previously used the scheme and only in respect of employees that have been previously furloughed for a 3 week period.
However, flexibility for employers now increases and they will be able to bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS grant for the hours not worked. Employers must agree any new flexible furloughing arrangement with their employees and confirm this agreement in writing.
The wage cap is proportional to the hours an employee is furloughed, i.e. the hours not worked. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours.
Employers will have to pay employees at their normal rate of pay for the hours they work.
From 1 August 2020, the government will pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough. Employers will pay in full for the hours they work at the employees normal rate of pay, and all ER NICs and pension contributions.
From 1 September 2020, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will top up to ensure the employee receives 80% total up to a cap of £2500 for furloughed hours. Employers will pay in full for the hours they work at the employees normal rate of pay, and all ER NICs and pension contributions.
From 1 October 2020, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will top up to ensure the employee receives 80% total up to a cap of £2500 for furloughed hours. Employers will pay in full for the hours they work at the employees normal rate of pay, and all ER NICs and pension.
The Coronavirus Job Retention Scheme will close on 31 October 2020.
Throughout this period our payroll team will be continuing to manage your CJRS and will always be available to answer any queries you may have. Do not hesitate to get in touch at your convenience.
Find out more about the CJRS at gov.uk
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