Coronavirus Jobs Retention Scheme
This scheme enables employers to “furlough” staff i.e. to have them not working but kept on payroll, and will cover a portion of salaries as well as employer pension and National Insurance contributions. Under the scheme announced by Chancellor Rishi Sunak, employers can claim a grant covering 80% of the wages for a furloughed employee, subject to a cap of £2,500 a month. Eligible employees include full-time, part-time, agency and zero-hour contracts, as well as employees who were made redundant since 19 March 2020 if they are rehired.
Updates to the scheme:
- 15/04/2020 – The cut off date was officially extended to 19th March. Read the article here.
- 12/05/2020 – The scheme will remain open until the end of October 2020. Read the article here.
- 29/05/2020 – The scheme was extended to provide flexibility. Read the article here and download a factsheet laying out key changes to the Job Retention Scheme and the Self Employment Income Support Scheme here. For information specifically related to the Self Employment Income Support Scheme, please use this link.
Employers can now only furlough employees that they have furloughed for a full three-week period prior to 30 June. People on paternity and maternity leave who return to work in the coming months will be eligible for the government’s furlough scheme if their employer has previously furloughed staff members. Read further information on parents returning to work here.
What you need to do from July:
- start your flexible furloughing of employees from 1 July onwards. You can decide the hours and shift patterns they work to suit the needs of your business – you’ll pay their wages for the time they’re in work and can apply for a job retention scheme grant to cover any of their usual hours they are still furloughed for. You can still keep employees on full furlough if you need to
- claim for periods ending on or before 30 June, by 31 July – this is the last date you can make those claims
- claim for further furlough periods as needed – the first time you will be able to make a claim for days in July will be 1 July.
Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing. If employees are unable to return to work, or employers do not have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules.
With regards to changes in employer contributions towards the scheme, the following roadmap has been made available by HMRC:
- June / July – government will pay 80% of wages up to a cap of £2,500 including employer National Insurance and pension contributions for hours not worked; employers will pay employees for any hours they work
- August – government will continue to pay 80% of wages, employers will pay employer National Insurance and pension contributions
- September – government will pay 70% of wages up to a cap of £2,187.50 for hours not worked; employers will pay 10% of wages along with employer National Insurance and pension contributions
- October – government will pay 60% of wages up to a cap of £1,875 for hours not worked; employers will pay 20% of wages along with employer National Insurance and pension contributions
You can get a template letter to assist with furloughing employees through the ChamberHR document library. Read a series of FAQ’s which have been compiled by British Chambers of Commerce and Quest cover, here.
The scheme is now open for claims and you can begin the process by clicking here.
We have gathered below some of the key information and guidance you will need to help make a claim:
- Check your eligibility and how much you can claim
- Step by step guide for employers
- How to calculate 80% of wages and other eligible costs
- Coronavirus Job Retention Scheme calculator (to help with the above)
- Guidance from The Pensions Regulator on CJRS and employer duties around pension contributions
Please note that before you start to make a claim you will need the following:
- to be registered for PAYE online
- your UK bank account number and sort code
- your employer PAYE scheme reference number
- the number of employees being furloughed
- each employee’s National Insurance number
- each employee’s payroll or employee number
- the start date and end date of the claim
- the full amount you’re claiming for including employer National Insurance contributions and employer minimum pension contributions
- your phone number
You also need to provide either:
- your Corporation Tax unique taxpayer reference
- your Self Assessment unique taxpayer reference
- your company registration number
Page updated: 18/06/2020