It has been confirmed that the second phase of the Coronavirus Job Retention Scheme will run from 1st July to 31 October 2020. The first phase of the CJRS will end on 30 June and all claims in respect of furlough periods under the first phase must be made to HMRC on or before 31 July.
Phase 1 – CJRS to 30 June 2020
The CJRS is available for any employee who was on the payroll by 19 March 2020 and was reported to HMRC as an employee on an RTI submission by that date.
The furlough period can begin from 1 March 2020 (i.e. be backdated) and the grant will be available to cover wages paid to furloughed employees for
periods until the end of June.
The grant covers for each employee:
• 80% of the regular wage (capped at £2,500) per month; plus
• related employers’ National Insurance Contributions (NIC); and
• minimum auto enrolment employer pension contributions on that wage.
This gives a maximum grant per employee per month of (using 2020/21 rates) £2,500 + £244 (employers’ NIC) + £59 (pension contribution) = £2,803.
Claims should be made from the date the employee finishes work and starts furlough, not when the decision is made.
The employer must submit a CJRS claim for a furlough period ending on or before 30 June, before it is permitted to claim under the CJRS for periods from 1 July onwards.
Phase 2 – CJRS from 1 July 2020
No new employees can be furloughed from 1 July 2020 and no new employers can use the CJRS from that date. Where an employee has not been furloughed so far, they must start their first period of furlough by 10 June 2020 in order to complete 21 days of furlough by 30 June 2020.
The maximum number of employees included in a claim from 1 July onwards cannot exceed the number of employees that employer included in any CJRS claim for periods up to 30 June 2020.
The scheme will allow far more flexibility to permit employees to be furloughed for any length of time, even down to a few hours. This means that employees can, at the employer’s discretion, come back to work on a part time basis and be furloughed for the remainder of their usual working hours. The maximum pay while on furlough will be prorated down from £2,500 per month according to the amount of time the employee spends on furlough. For example, an employee who is furloughed for 40% of his normal working time, can be paid maximum furlough pay of £1,000 per month (£2,500 x 40%).
From August, any furloughed employee must still receive at least 80% of their normal regular wage, but any employer using the scheme will have to make a contribution to furloughing costs, as follows:
Further information is expected to be published on 12 June 2020 to explain how phase 2 of the CJRS will work in practical terms.