Overview of upcoming changes to CJRS

As we mentioned in our previous article, CJRS closed to new entrants on 30 June and flexible furlough was introduced in July. Now, further changes are about to come into force as the Government begin to taper away their contributions from August onwards.

Our dedicated payroll team have been advising our clients on what the changes mean for them and their employees. Since the scheme went live, they have submitted over 350 claims worth almost £4m on behalf of our clients and have guided those completing their own claims through the process.

To remind you of the things you need to know and when you can expect them, we’ve highlighted the upcoming changes below.

July

If you haven’t already submitted your claims for June, 31 July is the last day that you can submit claims for periods ending on or before 30 June. Make sure you do this before the deadline.

As we discussed earlier, employers can now bring furloughed employees back to work part time and claim for hours not worked as per flexible furlough.

The grant levels have not changed, the government will continue to pay 80% of wages up to a cap of £2,500 and all ER NICS and pension contributions.

August

From August, the government will continue to pay 80% of wages, up to £2,500 but employers will be required to pay the Employer National Insurance (ER NICs) and pension contributions for the hours the employee is on furlough.

Claims for July will need to be submitted by 31 August, if not before.

September

From September, the government will pay 70% of wages, up to £2,187.50 for furloughed hours. Employers will be required to top up the employees’ wages to ensure they continue to receive 80%, up to £2,500 for furloughed hours and the ER NICs and pension contributions.

Claims for August will need to be submitted by 30 September, if not before.

October

This will be the last month the CJRS runs for – the scheme will close on 31 October.

For October, the government will pay 60% of wages, up to £1,875 for furloughed hours. Employers will be required to top up the employees’ wages to ensure they continue to receive 80%, up to £2,500 for furloughed hours and the ER NICs and pension contributions.

Again, claims for September will need to be submitted by 31 October, if not before and claims for October must be submitted by 30 November or you will lose out on the support.

It is entirely at the employers discretion if they wish to “top up” the remaining salary, they are not obliged to as part of the scheme.

The table below shows the changes if the employee was furloughed for 100% of their working hours. The timetable will change if, for example, the employee is only furloughed for 60% of their usual hours, they are only entitled to 60% of the £2,500 threshold.

Job Retention Bonus

In the Summer Statement, the Chancellor announced a Job Retention Bonus to incentivise employers to continue to employ their furloughed employees through to the end of January.

For every furloughed employee who remains continuously employed through to 31 January 2021, all UK employers will receive a one-off payment of £1,000. Employees must earn above the National Insurance lower earnings limit (£520 per month) on average between 31 October 2020 when the CJRS ends and the end of January 2021.

All confirmed bonus payments will be made from February 2021. Further details on the bonus scheme are expected to be released before the end of July.

If you are looking for support or advice on the upcoming changes to CJRS, you can contact our payroll team on info@eqaccounting.co.uk or call 01382 312140.