An important reminder - make sure you know about the Coronavirus Job Retention Scheme changes in September!

First published on 07 September 2020 by Alastair
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It’s a difficult time for many. Employers the length and breadth of the country are taking stock and wondering how many of their furloughed employees they will be able to retain. These are business-critical decisions, made worse because of the impact they will have on the individuals concerned.

However, it’s equally important that employers don’t ignore the changes to the CJRS that kicked in from 1st September. Failure to do so – or to implement them incorrectly - will potentially cost you money if you are subsequently investigated by HMRC.

Since 20th March 2020 when the furlough scheme came into effect, thousands of employers have furloughed all, or part, of their workforce and, initially, claimed 80% of employee wage costs, to a maximum of £2500 per employee per month. The scheme has been widely praised and many employers have taken advantage of it, but the Government is adamant that it cannot go on forever.  Indeed, key changes to the Scheme were introduced in August following changes have now come into effect from 1st September, viz,

Further contributions from employers are required.  From 1st September, the Government's grant decreased and now covers 70% of furloughed employee wages at a reduced cap of £2187.50. Employers are expected to top up the remaining 10%, up to a maximum of £312.50 per month. As previously, they are also expected to continue to pay employee NI and employer pension contributions.

Next, there are further changes that will come into effect from 1st October.

From 1st October, the Government will only cover 60% of furloughed employee wages at a cap of £1875, meaning employers will need to top up the remaining 20%.

October is the final month of the Scheme.  From 1st November, employees will no longer be able to be placed on furlough.  At time of writing, it looks unlikely that the scheme will be extended.  Consequently, employers need to start getting ready for when the scheme does finally come to an end.  As an incentive to encourage firms to retain staff, the Government have established the Job Retention Bonus. Under this, employers will receive a bonus of £1000 for every employee who was previously furloughed and is kept on until at least 31 January 2021, provided they meet these eligibility criteria:

  • they have been continuously employed by the company from the time of the company's most recent claim for that employee until at least 31 January 2021
  • they have been paid an average of at least £520 a month between 1 November 2020 and 31 January 2021; the employee does not have to be paid £520 in each month, but must have received some earnings in each of the three calendar months that have been paid and reported to HMRC via Real Time Information (RTI)
    up-to-date RTI records are available for the period to the end of January 2021
  • they are not serving a contractual or statutory notice period, that started before 1 February 2021, for the employer making a claim.

Put simply, if you are an employer, you need to make sure you follow the rules for claiming the grant fully. If you need advice, please don’t hesitate to get in touch.

Julie Downie, Accounts Manager

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