Take action by 10th June for new entrants to Job Retention Scheme

5th June 2020

In the latest government guidance it was announced that the current Job Retention Scheme will close to new entrants from 30th June 2020, to be replaced by a Flexible Furlough Scheme. 

Coronavirus job retention scheme

What is changing to the Job Retention Scheme?

The current JRS scheme will close to all new entrants after 30th June 2020 and any claims within this scheme must be made by 31st July.  This means that the final date from which an employee must be furloughed is 10th June, in line with the minimum 3 weeks’ furlough requirement under the current scheme.  If you have an employee that you require to furlough not yet on the scheme them you will need to adhere to these deadlines.

Flexible Furlough Scheme

The existing JRS will be replaced by a Flexible Furlough Scheme from 1st July 2020.  The key change to this scheme is that it will allow employers to bring employees back into the workforce for any period of time, rather than adhering to the previous 3-week rule, with part-time working permitted.
Employers will still be liable to pay the relevant wage for any work carried out, along with the associated ERs, pension contributions and NIC costs, but for those hours not worked, then these will be claimable through the new Flexible Furlough Scheme.

Some guidance to be aware of

  • As per the previous scheme, any furlough arrangement, including that covering part-time hours, must be agreed in writing with the employee.
  • The new scheme will only be available to employers that have previously used the Job Retention Scheme.
  • All worked hours must be reported to HMRC for each flexibly-furloughed employee, alongside the usual hours that the employee would have worked during that claim period.
  • Claim periods will no longer be permitted to overlap months
  • Any claim must be for a minimum of 1 week.

 

Phasing of Scheme

The new scheme will be gradually phased, removing the level of government financial assistance in stages in a return to businesses supporting themselves as the economy restarts.

July

Up to 80% of wages will be paid up to a maximum support level of £2,500 for the hours not worked by the employee.  This includes ERs, NICs and pension contributions.

August

Up to 80% of wages will be paid up to a maximum support level of £2,500 for the hours not worked by the employee.  Employer must now cover any ERs, NICs and pension contributions for hours included in furlough claims.

September

Up to 70% of wages will be paid up to a maximum support level of £2,187.50 for the hours not worked by the employee, with the employer paying 10% of this on the first £312.50  Employer must now cover any ERs, NICs and pension contributions for hours included in furlough claims for the full 80%.

October

Up to 60% of wages will be paid up to a maximum support level of £1875 for the hours not worked by the employee, with the employer paying 20% of this on the first £625.  Employer must now cover any ERs, NICs and pension contributions for hours included in furlough claims for the full 80%.

Further details of how to calculate the new Flexible Furlough Scheme claim, along with details of how to claim, will be provided in an update by government on 12th June.

For further information please visit https://www.gov.uk/government/news/chancellor-extends-self-employment-support-scheme-and-confirms-furlough-next-steps

Questions?

If you have any questions about how this might impact your business or actions you should take, please call our expert team, who are here to help.

All information published is for general consumption and should not constitute financial advice.  All coronavirus updates are being written and distributed as timely as possible for the convenience of our audiences and will be monitored regularly for any updates and/or corrections.  Individual circumstances will vary and professional advice should always be sought on all matters before action is taken.

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