Coronavirus Job Retention Scheme (CJRS) changes

A furloughed worker who benefits from the CJRS changes returns to work Guidon Group Stockton Accountants

Coronavirus Job Retention Scheme (CJRS) changes

More than 9m workers in the UK have been on furlough as businesses took advantage of the Coronavirus Job Retention Scheme (CJRS). From next month, the scheme changes and last week the government released full details of the flexible furlough scheme.

The scheme is being phased out over the next few months and will end on 31st October. Over the coming months, the amount of support will reduce and employer National Insurance contributions and pension contributions must be paid by employers from August.

CJRS changes

• From 1st July, employers can bring furloughed workers back to work part-time, providing the working pattern is agreed with the employee.

Only workers furloughed for at least three weeks on or before 30th June under the old scheme can be furloughed after 1st July. From then, there is no minimum furlough period (which was originally 3 weeks), but any claim submitted must be for a minimum of 7 calendar days. Any claims for periods up to 30th June must be submitted by 31st July.

• From July, the government will pay 80% of wages up to £2,500 per month for the hours the employee is on furlough as well as employer NI contributions and pension contributions. Employers must pay employees for any hours they work.

• In August, the government continues to page 80% of wages, but employers must start to pay employer National Insurance and pension contributions.

• From 1st September, the amount the government pays falls to 70% up to a cap of £2,187.50. Employers must top up employees’ wages to ensure they receive 80% of their wages up to £2,500.

• In October, the government will pay only 60% of employee wages up to £1,875 per month for the hours the employee is on furlough. Employers must top up employees’ wages to ensure they receive 80% of their salary up to £2,500 for the time they are furloughed and pay the employer NI and pension contributions.
Remember, the wage caps are proportional for the hours not worked and employees can still choose to top up wages to 100%.

Written agreements

Government guidance states new written agreements are needed to confirm the new furlough arrangements. And make sure you keep a copy of all your records relating to the CJRS scheme. You may need to keep these for five to six years and they must include:

  • The amount claimed and claim period for each employee
  • The claim reference number
  • Your calculations

For employees who are flexibly furloughed, their usual hours including any calculations and the number of hours they have worked.
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