Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme (CJRS) continues to run until 30 September 2021, with staged decreases in the claims that can be made.
Currently 80% of usual wages for the hours employees do not work can be claimed, up to a cap of £2,500 per month. The amount that can be claimed begins to change from 1 July 2021.
From 1 July CJRS will pay 70% of usual wages up to a cap of £2,187.50 per month for the hours furloughed employees do not work (this is down from 80%, capped at £2,500 per month).
From 1 August CJRS will pay 60% of usual wages up to a cap of £1,875.00 per month for the hours furloughed employees do not work.
From 1 October CJRS will close.
Employers will still be required to pay 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. Employers will therefore incur the difference in the cost been the 70% or 60% being claimed and the amount being paid.
Employers will continue to have to pay furloughed employees’ Employers National Insurance and Employers Pension Contributions in full following the changes on 1 July. Employers can still choose to top up employees’ wages above the 80% level or cap for each month if they wish, at their own expense.
Conditions of Claiming CJRS Grants
One of the conditions of claiming CJRS grants is that employers must pay all the associated employee tax and National Insurance contributions to HMRC. Not doing so may mean the whole of the CJRS grant will need to be repaid and future CJRS grants may not be claimable.
If you are having difficulty paying any of tax liabilities to HMRC, we can work with you to explore affordable payment options – for example, through a payment plan where you can pay in instalments. To find out more, go to GOV.UK and search ‘time to pay arrangement’.
Redundancies As A Result of CJRS Ending
With CJRS closing from 1 October employers may be considering making some employees redundant. We recommend employers in this position seek professional advice from a HR consultant as soon as possible. Should you require a recommendation of a HR consultant please contact your partner at CFW.
UK Government guidance on the Coronavirus Job Retention Scheme can be found here.