Coronavirus Job Retention Scheme – Claims from July – October 2020

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On 12th June 2020 the Government gave details of the changes to be made to the Coronavirus Job Retention Scheme (CJRS).

There is effectively a new CJRS in place for furlough periods from 1 July 2020. Furlough periods that straddle 1 July are treated as ending on 30 June 2020 and then restart under the new scheme on 1 July. Two separate claims will be needed for such straddling furloughs, with furlough days up to 30 June 2020 to be included in the June claim.

– some of the main changes are as follows:

  • From July, employers are allowed to ‘flexibly-furlough‘ their employees, which means that they will be allowed to return to work part time and still claim under the CJRS scheme for the hours that the employee is not working. The rules are also changing regarding the number of employees that an employer can furlough from July – you should refer to the GOV.UK guidance below for more information:https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
  • From August, employers will no longer be able to claim for employer NIC and pension contributions.
  • From September, although the employer is still required to pay furloughed employees 80% of their normal salary (for hours not worked), they will only be able to claim back 70% under the CJRS scheme.
  • From October, although the employer is still required to pay furloughed employees 80% of their normal salary (for hours not worked), they will only be able to claim back 60% under the CJRS scheme.

The CJRS scheme ceases at the end of October.

The changes that are being implemented from July 2020 mean that the CJRS calculator feature within Payroll Manager can ONLY be used for claims up to the end of June 2020. From 1 July onwards you would need to either perform the claim calculations manually, or use the HMRC CJRS claim calculator.

See the GOV.UK page below for further information about these changes:

https://www.gov.uk/government/publications/changes-to-the-coronavirus-job-retention-scheme/changes-to-the-coronavirus-job-retention-scheme

A summary of some of the changes is given in the table below:

changes to CJRS

 

Flexible-furloughing

From July, if your employee is flexibly furloughed (ie. they work some hours and are furloughed for others) then you will need to work out your employee’s usual hours and record the actual hours they work as well as their furloughed hours for each claim period You may choose to create a spreadsheet using Excel (or similar) to record this information as it is not something that can be entered into Payroll Manager.

The GOV.UK guidance (below) gives examples of how this should be done.

https://www.gov.uk/guidance/steps-to-take-before-calculating-your-claim-using-the-coronavirus-job-retention-scheme#work-out-your-employees-usual-hours-and-furloughed-hours

Recording employee payments in Payroll Manager

When it comes to calculating a claim under the CJRS scheme, it will prove useful to have recorded the pay an employee receives whilst furloughed and the pay they receive whilst working in separate columns on the ‘Pay Details’ screen. Our Furloughed Workers guide shows how to add these columns. You may already have set these columns up within the software.

Calculating the CJRS claim

Payroll Manager is not able to calculate CJRS claim amounts from July onward because of the new rules regarding flexible-furlough, so you should either calculate your claim manually, using HMRC guidance (links below) or use the HMRC CJRS Claims calculator.

https://www.gov.uk/guidance/steps-to-take-before-calculating-your-claim-using-the-coronavirus-job-retention-scheme#work-out-your-employees-usual-hours-and-furloughed-hours

https://www.gov.uk/guidance/calculate-how-much-you-can-claim-using-the-coronavirus-job-retention-scheme

https://www.tax.service.gov.uk/job-retention-scheme-calculator/

 

 

 

 

 

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