Coronavirus Job Retention Scheme

COVID 19 News and Updates – UK | Prager Metis | Jun 08, 2020

• CJRS closes to new entrants on 30 June.

• Given the minimum furlough period, if Employers are yet to make a claim under CJRS and they wish to do so going forward under the new scheme “CJRS2” then they have until 10 June to notify staff so that their period of furlough can commence in time.

• For Employers who have previously made a claim under CJRS, they too have until 10 June to notify any employee not previously furloughed, if they wish for that employee to be eligible under CJRS2.

What We Know

• The CJRS scheme, which was due to end on 30 June has been amended by the Chancellor.

• The new scheme “CJRS2” now allows employers to be able to put staff on part-time furlough, claiming the CJRS grant for a portion of their salary.

• Critically, employers will only be able to claim going forward if they have previously claimed under the pre-1 July scheme “CJRS1”.

• Only employees who have been included in a claim under CJRS1 will be eligible under CJRS2.• Note that as there is a three-week minimum furlough requirement under CJRS1, so any new period of furlough leave must have started by 10 June 2020 to be complete when the current scheme ends on 30 June and so ensure the employee remains eligible from 1 July.

To be eligible for CJRS1 and hence CJRS 2 employees must have been on payroll (i.e. an RTI submission must have been made) on or before 19 March 2020.

What Is Changing?

• The For July 2020, the grant will be available on the same basis as under CJRS1 (i.e. the lesser of 80% of pay and £2,500).
• The Government’s contribution over the remaining months of the scheme – August to October –will reduce with a corresponding increase in the employer contribution as follows:

  • August – the CJRS will continue to pay 80% of wages
  • September – the CJRS will pay 70% of wages while employers will take on the other 10%
  • October – the CJRS will pay 60% of wages while employers will take on the other 20%

CJRS2 has many of the same features as CJRS1 however there are some significant which are set out below:

  • Employees who were previously furloughed will be able to return to work on a flexible part-time
    basis.
  • For those staff who are furloughed part-time, employers will be required to pay for the cost of
    the time staff are working. A grant will be available for the cost of their furloughed hours.
  • From 1 August onwards, the scheme will no longer cover the cost of employers’ National
    Insurance nor pension contributions applicable to the grant.
  • The new calculation will apply from 1 July to factor in the cost of hours worked to hours
    furloughed ratio.
  • 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. Further details will be included in future guidance.
  • Employers will need to report hours worked and the usual hours an employee would be
    expected to work in a claim period.
  • 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.
  • There will be a new maximum limit to the number of staff who can be included on a claim. This
    will be based on the maximum staff ever included in a single claim under CJRS1.
  • CJRS2 will end on 31 October 2020.

• Employees must have been furloughed under the current scheme (CJRS1) for them to be eligible for a furlough grant under the revised scheme (CJRS2). So, only employees who have been included in a furlough grant claim made before 1 July 2020 can be furloughed under CJRS2.

• CJRS1 covered only the period 1 March 2020 to 30 June 2020 so this means the CJRS is closed to new entrants after 30 June 2020.

• Employers and agents who have yet to submit claims under CJRS should consider this as a matter of urgency given the deadline of 10 June.

• HMRC is hoping to publish detailed guidance on CJRS2 on 12 June 2020

Useful Links

Factsheet For SEISS and CJRS Schemes