From 1 October, HMRC will pay 60% of usual wages up to a cap of £1,875 per month for the hours furloughed employees do not work.
You will continue to pay your furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. You will need to fund the difference between this and the CJRS grant yourself.
The caps are proportional to the hours not worked. For example, if your employee is furloughed for half their usual hours in October, you are entitled to claim 60% of their usual wages for the hours they do not work, up to £937.50 (half of £1,875 cap). You must still pay your employee at least 80% of their usual wages for the hours they don’t work, so for someone only working half their usual hours you’d need to pay them up to £1,250 (half of £2,500 cap), funding the remaining portion yourself. For help with calculations, use the online HMRC calculator here
You’ll also continue to pay your furloughed employees’ National Insurance and pension contributions from your own funds.
Firstly, just a reminder that this scheme will end on 31 October 2020. Any claims to HMRC under the scheme will need to be made by 30 November 2020. If overclaims have been made previously through the scheme the easiest way to deal with this is by making a repayment by an adjustment to the next claim. However if a grant has been overclaimed and not adjusted this way there are time limits to notify HMRC, and arrange repayment:
- For claims paid before 22 July 2020, the time limit to notify HMRC 22 October 2020
- Claims paid after 22 July 2020, the limit to notify HMRC is within 90 days of receipt
Failure to notify is likely to result in penalties being charged by HMRC which are likely to be significant since they will be taking a strong view of incorrect claims made.
You’ll be able to claim a one-off payment of £1,000 for every eligible employee you furloughed and claimed for through the Coronavirus Job Retention Scheme (CJRS) and kept continuously employed until at least 31st January 2021. You do not have to pay this money to your employee.
To be eligible, employees must earn at least £1,560 between 6 November 2020 and 5 February 2021 and have received earnings in the November, December and January tax months. Employees must also not be serving a contractual or statutory notice period for you on 31 January 2021.
You will be able to claim the bonus from 15th February until 31st March, once you have submitted PAYE information for the period up to 5 February 2021. HMRC will let you know how you can make a claim when further guidance is published by the end of January.
You can still claim the Job Retention Bonus if you make a claim for the same employees through the Job Support Scheme, as long as you meet the eligibility criteria for both.
Further information can be found on GOV.UK by searching ‘Job Retention Bonus Guidance’.
The government recently announced the Job Support Scheme (JSS) to protect jobs where businesses remain open but are facing lower demand over the winter months due to COVID-19.
Under JSS the government will contribute towards the wages of your employees if they are working fewer than normal hours due to decreased demand. You will continue to pay the wages for the hours your staff work. Employees must work at least 33% of their usual hours. For the hours not worked, you and the government will pay a third each of their usual wages (the government contribution is capped at £697.92 per month).
On 9th October the government announced an expansion of the JSS, to provide temporary support to businesses whose premises have been legally required to close as a direct result of coronavirus restrictions.
Under this expansion, affected businesses will receive grants towards the wages of employees who have been instructed to and cease work. This will cover businesses that, as a result of restrictions set by one or more of the four governments of the UK, are legally required to close their premises, or to provide only delivery and collection services from their premises.
The government will pay two thirds of employees’ usual wages, up to a maximum of £2,100 per month. You will not be required to contribute towards wages, but do need to cover employer National Insurance and pension contributions.
You can apply for the JSS including the new expansion even if you haven’t previously used the Coronavirus Job Retention Scheme (CJRS). JSS is available for six months, from 1st November, with payment of grants in arrears from early December. The scheme will be reviewed in January.
Search 'Job Support Scheme expanded to firms required to close due to Covid Restrictions’ and ‘Job Support Scheme factsheet’ on GOV.UK for more details. Further information will be published in the coming weeks.
