For businesses that are unable to maintain their current workforce due to coronavirus, they can furlough employees and claim a grant through the Coronavirus Job Retention Scheme (CJRS).
The scheme is open to UK employers that have created and started a payroll scheme by 19th March 2020 and will be available until 31st October 2020.
A recent update to the scheme has confirmed that it will close to anyone that has not been furloughed for 3 weeks by 30th June 2020. Therefore, if a business intends to furlough an employee, the furlough period will need to start on or before 10th June 2020 (this allows the minimum 3-week furlough period to be completed by 30th June 2020). Employers will then have up to 31st July 2020 to make claims for any periods of furlough up to 30th June 2020.
From 1st July 2020, the rules of the CJRS are changing:
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July 2020: the government will continue to pay 80% of wages up to £2,500 per month along with any employer national insurance and pension contributions. Employers can choose to pay the remaining 20% of salary but do not have to pay anything. Businesses will also be given the flexibility to bring employees back on a part-time basis. Employers will pay employees for the time worked as normal and the CJRS can be claimed for the usual hours not worked.
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August 2020: employers will be required to pay any employer national insurance and pension contributions. There is no change to the 80% of wages being paid by the government.
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September 2020: the government will pay 70% of wages up to £2,187.50 per month. Employers are required to pay the additional 10% of wages (to give a total of 80% to the employee) and the employer national insurance and pension contributions.
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October 2020: the government will pay 60% of wages up to £1,875 per month. Employers are required to pay the additional 20% and the employer national insurance and pension contributions.
HMRC are due to issue further guidance on all the changes on 12th June 2020.
