When Does The Furlough Scheme End

simon

Simon Misiewicz

1st November 2020

Coronavirus and the financial crisis

You may be interested to know how Coronavirus also is known as COVID19 affects other aspects of the economy be it self employment, property or other aspects of employment.

Please read up and keep up to date with the Government guidance to employers and employees in regard to Coronavirus: It is also worth keeping abreast of the ACAS employer/employee guidance:

We have written a similar piece on employer financial pressures caused by COVID19, which you may find useful.

Coronavirus Job Retention Scheme (CRJS) Extended through November 2020

Due to the health pressures caused by COVID19 on the NHS Boris Johnson met with government officials on 31st October 2020 and agreed on a national lockdown throughout the UK.

This clearly has a significant impact on business owners and employers.

Boris Johnson alongside Rishi Sunak has agreed to extend the Furlough Scheme for Employers that was originally brought into play in March 2020.

This means that the Furlough Scheme that was due to end 31st October 2020 will now be extended through March 2021

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Who can claim the Furlough Scheme?

All UK employers that have a UK bank account that employee people in the UK will be able to make a claim against the Furlough Scheme

The employees must

– Be based in the UK

– Be on the payroll on 30th October 2020

– Submitted Real Time Information (RTI) payroll submissions for those employees on or before 30th October 2020.

– Not work and be left at home if employers are to make them Furloughed

– Not be made redundant if employers are to claim Furlough

Coronavirus Job Retention Scheme (CJRS) and the Job Support Scheme (JSS)

The Coronavirus Job Retention Scheme will be extended through to November 2020 and will then be replaced by the Job Retention Scheme. Originally the JSS was to be introduced on 1st November 2020.

The introduction of the JSS was postponed until December 2020 as a result of the national lockdown that was communicated to the UK on 31st October 2020.

The Job support Scheme will be enacted on 1st December 2020 or soon after.

How much will be paid under CJRS? - Furlough scheme calculator

Employers will be able to Furlough UK employees and claim money against the government via the Coronavirus Job Retention Scheme (CJRS).

The amount that employers can claim against the CJRS Furlough scheme is the lower of:

– 80% of the paid wages

or

– £2,500

Example: staff paid £30,000

If a staff member is paid an annual salary of £30,000 then their monthly wage would be paid £2,000. This is 80% of their usual £2,500 wage (£30,000 divided by 12)

This is the maximum that the staff member could receive. This also means that this staff member would lose £500 of their usual monthly salary.

Example: staff paid £40,000

A staff member is paid an annual salary of £30,000. Their normal monthly wage would be paid £3,333.

However, due to the cap of the Furlough scheme the employee would only be paid £2,500. This means this employee would not be paid the remaining £833.33.

Can employers bridge the gap?

Employers can pay the 20% that employees miss out on. Employers may also pay the excess above the £2,500 CJRS Furlough scheme cap.

It is unlikely that many employers will be able to make this additional payment as they look to survive and retain those employees beyond the COVID19 health crisis

What will employers be expected to pay under CJRS and Furlough scheme?

Employers will be expected to pay the following:

 Worked hours

If employees are able to work, they should. Employers will continue to pay the full salaries of working employees during the November 2020 lockdown.

Unworked hours 

Employers will not have to pay the staff the wages/salaries of those employees are not working that have been placed on Furlough.

However, employers will continue to pay

– National Insurance Contributions

– Pension contributions

– Bonuses

– Commissions

The CJRS Furlough Scheme will only pay the contracted basic wage of employees.

How do employers make a claim against the CJRS Furlough scheme?

Employers will need to calculate the amount of money that will be paid to employees based on the above, which includes:

Employer contributions:

– £X Worked hours

– £X bonus

– £X commission

 

Government contributions

– £X the lessor of the 80% salary or £2,500

 

Employees will need to access the CJRS Furlough scheme portal

Employers will then need to claim back the movement financial support

It is vitally important that employers work out the payment made to employees to ensure that they do not over claim against the CJRS Furlough scheme as this is a fraud that will be penalised.

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