Furlough changes and upcoming deadlines
The Coronavirus Job Retention Scheme was introduced in March 2020, however any businesses who are continuing to use the scheme need to be aware that changes were made to the scheme on the 1 July 2020.
The deadline for submitting claims for the period up to the 30 June 2020, now known as the old scheme, is the 31 July 2020 so businesses only have a matter of weeks left. Once the deadline has passed, businesses will be unable to claim any further Furlough grants under the existing scheme.
Additionally, if businesses have not made a claim under the first furlough scheme, they will also be unable to claim any grants under the new Flexible Furlough Scheme.
The new scheme was implemented on 1st July 2020 which is known as the start of ‘flexible furloughing’. The aim of the scheme is for businesses to bring back their employees for as many hours as required but then the CJRS grant will cover the remaining further hours that the employee would normally work.
The flexible approach will see many businesses bring back their staff on a part time basis meaning they will have to track the number of hours their staff will be working as part of the ‘flexible furloughing’ scheme.
Businesses need to bear in mind that where a pay week spans over two separate months, a log of hours will need to be kept as they will fall into two separate claims. Employees must also receive a formal letter from their employer in writing to highlight this new arrangement – employment lawyers will be able to offer the most appropriate way of implementing the scheme in workplaces.
Additional changes to the furlough scheme also mean that employers will now be required to contribute to the cost of furloughed employees through the following stages set out by the Government:
- From 1 August 2020, employers will be required to pay national insurance (NI) and pension contributions
- From 1 September 2020, employers will be required to pay 10% of furloughed employees wages plus NI and pension contributions
- From 1 October 2020, employers will be required to pay 20% of furloughed employees wages plus NI and pension contributions.
The changes will apply between July and October 2020 before the scheme closes on 31 October. HMRC will also be checking CJRS claims over the next five years – please contact our Furlough team by sending an email to firstname.lastname@example.org if you require support or assistance.