Changes to Coronavirus Job Retention Scheme

Flexible furloughing and a tapering of HMRC contributions to furloughed employees’ wages are some of the changes being introduced to the Coronavirus Job Retention Scheme (CJRS).

Employer costs

  • In June and July 2020, the government’s contribution to the wages of furloughed employees under CJRS will continue unchanged, i.e. with HMRC paying 80% of wages up to a cap of £2,500 per month with no contributions from the employer and HMRC reimbursing employer NICs and minimum employer pension contributions.
  • In August 2020, HMRC will provide the lower of 80% of wages or £2,500 per month but employers will not be able to reclaim employer NICs and minimum pension contributions.
  • In September 2020, HMRC will pay 70% of wages up to a cap of £2,187.50 per month with employers being required to pay 10% of wages to make up 80% total up to a cap of £2,500 per month and employers will not be able to reclaim employer’s NICs and minimum pension contributions.
  • In October 2020, HMRC will pay 60% of wages up to a cap of £1,875 per month with employers being required to pay 20% of wages to make up 80% total up to a cap of £2,500 per month and employers will not be able to reclaim employer’s NICs and minimum pension contributions.
  • On 31 October 2020, the CJRS will close altogether.
  • As with the previous scheme, the employer can choose to top up the payment if they want to.

Closure of CJRS to new entrants

  • The CJRS will close to new entrants from 30 June. 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. There are exceptions for those employees on maternity, paternity, shared parental, adoption or parental bereavement leave or military reservists returning from active duty, who were off before 10 June and returned after 10 June. To qualify, the employer must have furloughed other employees and made an RTI submission for these returning employees on or before 19 March 2020.
  • This means that apart from these exceptions there is a final deadline of 10 June to furlough employees who have not previously been furloughed, to qualify for the new CJRS scheme that starts on 1 July.
  • From 1 July the scheme will only be available to employers that have previously used the scheme in respect of employees they have previously furloughed for a minimum of three weeks.
  • Employers have until 31 July 2020 to claim for furloughed employees under the old scheme up to 30 June 2020 but they cannot make more than one claim in any claim period.

Flexible furloughing

  • From 1 July, employers can bring back to work employees that have previously been furloughed for three weeks or more, for any amount of time and any shift pattern, while still being able to claim CJRS grant for those contracted hours/days that they are not required to work, i.e. employers will be allowed to furlough employees for only part of their working week, for example working two days a week and on furlough for the other three days.
  • The number of employees an employer can claim for in any claim period cannot exceed the maximum number they have claimed for under any previous claim under the current CJRS but this can be increased to include those returning from family leave and military reservists as above. 
  • When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of a week. This is a minimum period and those making claims for longer periods such as those on monthly or two weekly cycles will be able to do so but the claim cannot straddle months.
  • To be eligible for the grant, employers must agree with their employee any new flexible furloughing arrangement and confirm that agreement in writing.
  • Employers can claim the grant for the hours their employees are not working calculated by reference to their usual hours worked in a claim period.
  • Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
  • Employers can still make claims in anticipation of an imminent payroll and the first claims can be made from 1 July.
  • For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.

Our Q&As on the CJRS have been updated to reflect these changes.