From 1 August 2020, the level of the CJRS grant paid to employers will be reduced each month. To be eligible for the grant employers must pay furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they are being furloughed.
The timetable for changes to the scheme is set out below. Wage caps are proportional to the hours an employee is furloughed. 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:
- There are no changes to grant levels in June.
- 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. Employers will have to pay employees for the hours they work.
- For August, the government will pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough and employers will pay ER NICs and pension contributions for the hours the employee is on furlough.
- For September, 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 pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
- For October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
Employers will continue to able to choose to top up employee wages above the 80% total and £2,500 cap for the hours not worked at their own expense if they wish. Employers will have to pay their employees for the hours worked.
Summary of CJRS post 30 June 2020
|Government contribution: employer NICs and pension contributions||Yes||No||No||No|
|Government contribution: wages||80% up to £2,500||80% up to £2,500||70% up to £2,187.50||60% up to £1,875|
|Employer contribution: employer NICs and pension contributions||No||Yes||Yes||Yes|
|Employer contribution: wages||–||–||10% up to £312.50||20% up to £625|
|Employee receives||80% up to £2,500 per month||80% up to £2,500 per month||80% up to £2,500 per month||80% up to £2,500 per month|
CJRS/SEISS AND ARMED FORCE RESERVISTS
Last week, Chancellor Rishi Sunak announced that members of the armed forces reserves who resume their usual employment after completing a period of active duty will be able to be furloughed by their employer under the recently extended Coronavirus Job Retention Scheme (CJRS) https://src-time.co.uk/coronavirus-job-retention-scheme-extension-full-update-as-at-02-june-2020/
He also announced that self-employed armed forces reservists who are currently ineligible for the Self Employment Income Support Scheme https://src-time.co.uk/self-employment-income-support-scheme-extended/as a result of their service will be able to access a grant.
To enable the introduction of more flexible, part-time furloughing, and support those already furloughed back to work, CJRS claims from July onwards will be restricted to employers currently using the scheme and previously furloughed employees https://src-time.co.uk/coronavirus-job-retention-scheme-extension-full-update-as-at-02-june-2020/
However, as some reservists will have been in active service during the outbreak and will be returning to work after this cut-off point, they have been exempted from the restriction – providing they work for an employer who has previously furloughed employees.
Reservists who currently cannot access the SEISS as a direct result of their service in 2018-19 will be able to make a claim for both the first and second SEISS grants, and further information on how to do this will be announced later this month
SRC-Time are one of the South East’s leading accountancy firms in advising businesses in all aspects of their accounting and tax affairs and we are able to assist in any issue raised above.
Our expert team is available to provide you with advice and can be contacted on 01273 326 556 or you can drop us an email at email@example.com or speak with an account manager to get any process started.