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Changes to the Coronavirus Job Retention Scheme

02/06/2020

Employment, Legal Updates

The planned changes to the Coronavirus Job Retention Scheme have been confirmed by the Chancellor and set out in a factsheet. Further guidance on flexible furloughing and how employers should calculate claims is expected from HMRC on 12 June.

Flexible furloughing

Employers will be given the flexibility to bring furloughed employees back part time from 1 July 2020, but will be responsible for paying the employees’ wages for the hours/days worked. Employers will be able to continue to claim under the scheme for the balance of an employee’s normal hours and will be required to confirm the usual hours an employee would be expected to work in a claim period and the actual hours worked.

Scheme closes to new employees from end of June

From July onwards, claims can only be made by employers already using the Coronavirus Job Retention Scheme in respect of previously furloughed employees.

The scheme will close to new entrants on 30 June, which means that the final date by which an employer can furlough an employee for the first time will be 10 June, in order to have met the three week minimum period of furlough. However, employers will have until 31 July to make any claims in respect of wages for June.

Employer contributions

The Coronavirus Job Retention Scheme is to be slowly tapered from August 2020, resulting in employers being required to gradually increase their contributions towards furlough pay.

The tapering will take effect as follows:

June and July:

  • The Government will pay 80% of wages, up to a cap of £2,500, plus employer National Insurance and pension contributions.
  • Employers are not required to pay anything.

August:

  • The Government will pay 80% of wages, up to a cap of £2,500.
  • Employers will pay employer National Insurance and pension contributions.

September:

  • The Government will pay 70% of wages, up to a cap of £2,187.50.
  • Employers will pay 10% of wages to make up 80% total, up to a cap of £2,500, plus employer National Insurance and pension contributions.

October:

  • The Government will pay 60% of wages up to a cap of £1,875.
  • Employers will pay 20% of wages to make up 80% total, up to a cap of £2,500, employer National Insurance and pension contributions.

    We await the further details from HMRC on 12 June.

    Speak to our specialist team for Employment law advice via 01603 660 811, or find out more in our Employment Law for Employees and Employment Law for Employers web pages.

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