Furlough Pay Changes 1st July 2020 (CJRS)
There have been several changes announced for the Coronavirus Job Retention Scheme coming in from 1st July. The July is a threshold, and it looks like claims will not be able to cross June and July, or July and August. There is also going to be a new template released for employees with over 100 employees furloughed.
Claims for July will not be able to be submitted until into July, and all claims for June must be completed by 31st July. Probably the biggest change for July is that furlough is to become flexible, so employees can return to work on a part time basis and remain on furlough for the rest of their usual hours.
To qualify for furlough pay from July there is the added criteria that the employee should have been furloughed for at least three weeks between the 1st March and 30th June. In July the employer can still claim employers pension and National Insurance, but the calculations have moved back to the original proposals prior to 20th April.
Announcements have also been made that from 1st August employer’s National Insurance and Pension can no longer be reclaimed, and the grant will be reduced from 80% from September. The term minimum furlough pay has also been used, probably in anticipation of when employees are to be furloughed beyond September the employer will need to contribute.
The requirement to keep good records has been noted again, but also HMRC have added some reassurance:
“Choose the calculation you think best fits the way your employee is paid. For example, if you pay your employee a fixed regular salary, use the calculation for fixed pay amounts. HMRC will not decline or seek repayment of any grant based solely on the particular choice of pay calculation, as long as a reasonable choice of approach is made.”
The Calculations from 1st July
(as anticipated from the information provided on 12th June!)
This is subject to change, and last time everything changed in the week that the claim portal went live, however this time there is far more detail and examples have been provided.
For fixed salaried employees that are not using the flexible return to work you can use the salary and multiply by 80% to get the furlough grant amount. If greater than the monthly or weekly caps then the grant amount is the cap.
Grant amount / the number of days in the month = Daily furlough pay
Daily furlough pay x number of days furloughed = furlough grant
Where the pay varies you can use the corresponding period last year or an average from last tax year. Using the previous period can be complex where the periods do not align exactly, and we would suggest caution if you chose to do this. There are examples available from the Government’s website as noted above