Businesses can claim for some of your employee’s wages if they have put them on furlough or flexible furlough because of Coronavirus.
In his Budget on 3 March 2021, the Chancellor of the Exchequer, the Rt Hon Rishi Sunak MP announced an extension of the Coronavirus Job Retention Scheme to September 2021 across the UK. Currently employees place on leave receive 80% of their pay, up to a maximum £2,500 per month. Employers will be expected to pay 10% towards the hours their staff do not work in July, increasing to 20% in August and September, as the economy reopens
Businesses will have flexibility to use the scheme for employees for any amount of time and shift pattern, including furloughing them full-time. Employers will need to agree a furlough agreement with the employee. For the hours not worked, employers will only be asked to cover the National Insurance and employer pension contributions which, for the average claim. For the hours worked, employers will need to cover employees’ contracted wages, National Insurance and employer pension contributions.
The Job Support Scheme and Job Retention Bonus have been postponed and CJRS has replaced them.
Neither the employer nor the employee needs to have previously claimed or have been claimed for under CJRS to make a claim under the extended CJRS (if other eligibility criteria below are met).
Click here to find out which employees you can put on furlough to use the Coronavirus Job Retention Scheme. Click here to check if you can claim for your employees' wages through the Coronavirus Job Retention Scheme.
Guidance has been updated with new calculation examples to cover the lookback period and examples to clarify eligibility for the annually paid. For examples to cover the lookback perio, click here, and for examples to clarify eligibility for the annually paid, click here.
Businesses can access the online portal here. Calculate how much you have to pay your furloughed employees for hours on furlough, how much you can claim for employer NICs and pension contributions and how much you can claim back. Employers should have all their information and calculations ready before beginning their application. They should retain all records and calculations, in case HMRC need to contact them.
Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.
To be eligible for the grant, employers must have confirmed to their employee (or reached collective agreement with a trade union) in writing that they have been furloughed. You must:
The employee does not have to provide a written response and you do not need to place all your employees on furlough.
If you flexibly furlough employees, you will need to agree this with the employee (Or reach collective agreement with a trade union) and keep a new written agreement that confirms the new furlough arrangement.
There is no minimum furlough period, agreed flexible furlough agreement can last any amount of time although unless otherwise specified the period that you claim for must be a minimum claim period of 7 calendar days. Employees can enter flexible furlough agreements more than once.
Employees still have the same rights at work, including:
Grants cannot be used to substitute redundancy payments. HMRC will continue to monitor businesses after the scheme has closed.
If you claim for periods starting on or after 1 December 2020, HMRC will publish details of your claim on GOV.UK. They are doing this because:
This information if publish monthly, updating the previous months information with any amendments. You can:
This article was written for Saint Financial Group, a multidisciplinary group based in the UK that helps small businesses develop and grow. SaintFG offers a range of quality solutions in supporting businesses.
Saint provides the luxury of free business consultancy for of our clients, call now for your free consultation with a friendly business advisor to discuss your burning questions and put that energy back into your business!
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