The Coronavirus Job Retention Scheme (CJRS) has been a lifeline for many employees working in businesses forcibly closed due to the coronavirus pandemic. But as lockdown restrictions ease off, so too must the support.
The government announced planned changes to the furlough scheme at the end of May, there will be a phased reduction in government funding for furloughed workers.
What’s Changing In July?
From the 1st July, businesses which are permitted to open may bring staff back on a full or part time basis, depending on what suits the business at that time. If an employer decides to bring a staff member back part time then the employer will pay for those part time hours and the government will top up the remaining pay – 80% of wages for furlough period up to a cap of £2,500 per month (with the cap being proportional to the hours not worked)
Employers should therefore start to prepare updated letters to send to staff currently furloughed to set out any new working patterns and arrangements which will apply from 1 July 2020.
Please be careful to keep accurate records, especially if bringing some staff back on part time or flexible hours as this will inevitably make calculations a little more complex.
Employers will have until 31 July to make any claims in respect of the period to 30 June, and will be able to make their first claim under the new scheme from 1 July.
Further information about how to calculate claims will be available by 12 June, so details might change.
With non-essential retail due to open on 15th June, followed by hospitality venues and hairdressers at the start of July, ensuring you bring staff back in a financially well-measured way is important.
Consumer habits have changed, so your business will probably not be as busy as it was before lockdown. You may wish to have restricted opening hours, days or reduce staff numbers until you get a feel for the market. And you may as well take this measured approach as staff are still supported by the CJRS.
What’s Changing In August?
The furlough scheme will still be available, with the government paying up to 80% of a staff member’s salary, however the employer will become liable for the pension and national insurance contributions.
The option to have employees working part time with a partial salary top up from the scheme will still be available, but the pension and NI contributions will be solely paid by the employer with no partial payment via the scheme.
What’s Changing In September?
From the start of September, the CJRS will begin to taper off in earnest. The government will provide 70% of an employee’s wage capped at a maximum of £2,187 per month
What’s Changing In October?
In October the scheme will be further tapered, allowing for 60% of an employee’s wage, capped at a maximum of £1,875 per month.
How Do I Claim?
If you are using Warr & Co to make your claim please provide us with full details of any changes ASAP. If you are claiming yourself you will claim in the usual way, by logging into your Government Gateway account to make a new claim to receive your funding.
You must notify your staff in writing regarding their furlough conditions. We recommend making a phone call as a first step if you can, as this is a more personal approach, but do ensure you follow up in writing for your and their records.
Also, if you’re a client you’ll need to notify your accountant so that we can keep your records straight during this time of change.