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7 April 2020The CJRS is a support package for businesses who can't pay their staff wages due to coronavirus. Here, we unpick the details and answer any questions you might have.
7 April 2020One of the largest measures put in place to safeguard jobs during the coronavirus pandemic is the Coronavirus Job Retention Scheme (CJRS). Below, we've dug into the details and answered the questions you might have about the scheme.
This information was correct as of 1 June 2020. We are working hard to ensure that all content on our site is up to date, and will make sure that this page is updated when more information is available.
The CJRS is a temporary scheme designed to support UK businesses impacted by coronavirus. It was created to secure people's incomes from March until October, despite the impact of the outbreak on the economy.
On 12 May, Rishi Sunak announced that the scheme would be extended until October 2020 in order to continue to support businesses hit by coronavirus. However, he also announced that from August the Government would start asking businesses to share the cost of the scheme.
The scheme is ending on the 31 October 2020
Introduction of part-time furlough: from 1 July, you'll be able to bring employees back from furlough on a flexible basis. This means that you can begin to bring employees back based on how urgently you need them. For exampe, you could bring back a full-time employee on a part-time basis, and claim furlough payments for the time they are not working. You'll be responsible for paying your employees wages while they're working, including tax and National Insurance contributions.
The scheme closed to new applicants on 30 June.
The amount the Government pays is decreasing: As employees gradually return to work, the Government will begin to reduce the amount of support that they provide businesses with through the scheme. From 1 August, although the Government will still pay 80% of employee's wages, business owners will be required to cover the cost of National Insurance and pension contributions. From 1 September, Government contributions will decrease to 70% with a limit of £2,187.50 per month, and from 1 October Government support will decrease to 60%, capped at £1,875.
Note: You can top up the government’s subsidy if you want to, but there is no obligation to.
While ‘furlough’ isn't a term recognised in UK law, it refers to an employee being temporarily laid off – usually without pay. The arrangement normally assumes the employee will return to their role once the agreed period is over.
But, under the CJRS staff will be kept on the payroll and keep their employment rights during the furloughed period. As above, businesses who make use of the CJRS will be provided with funds by the government to cover part of the wages of their furloughed staff.
Your business is eligible for the scheme if:
Note: If you, as an individual, have someone working for you (such as a nanny), you can also furlough them if you pay them through PAYE. If you have apprentices working for you, you can furlough them and they can still continue their training.
To begin with, you will need to notify each employee you wish to furlough. Set up a meeting, video call or phone discussion with each employee to discuss the situation – they will need to agree to be furloughed. You should also make any changes to the employment contract in agreement with them.
The government suggests businesses make their claims during or just before running payroll. This is because you need to claim the exact amounts in your payroll. You are responsible for reducing each employee’s wages to 80%. Claims can be backdated to 1 March for any employees already furloughed.
In order to claim CJRS, you'll need:
After checking your claim, HMRC will pay the amount claimed for by BACS to your UK bank account. You must pay the employee the whole grant you have received for their gross pay.
In order to make a claim, you'll first need to calculate the total amount you're claiming for each employee, including National Insurance and pension contributions.
The easiest way to do this is to use the GOV.UK CJRS calculator.
Once you've worked out how much you'll claim for each furloughed employee, you can start you application. For this, you'll need:
If you have both of these, you can begin your claim online. Claims should be paid out within six days.
Any employees who are on full-time, part-time, flexible, zero-hours or agency contracts, as long as they’ve been on the company’s PAYE payroll from 28 February 2020. If you’ve made employees redundant since 28 February 2020, you can re-hire them and furlough them.
An employee will need to agree to be furloughed in order for you to make use of the scheme.
Yes, as long as you do it through your board of directors. If the board of directors is acting to uphold the statutory duties of one or more of its salaried directors, it can make the decision to furlough those directors.
You must document the decision in the company records, though. And as furloughed director, you can carry out certain duties that directly satisfy your statutory obligations, but they can't generate revenues for the business or provide services to or on behalf of the company.
Yes, you can furlough people as they become at risk of redundancy so that can happen in stages.
Any employees you choose to furlough must remain so for a minimum of three consecutive weeks.
Yes, you can furlough employees multiple times as long as each instance is at least three consecutive weeks.
If your employees do not have a regular salary (for example they’re on a zero hours or flexible working contract), the government will pay 80% of either:
They’ll pay whichever option results in the highest amount.
It's up to you whether you need and can afford to keep employing your staff after the scheme is over.
For further information, visit the Coronavirus Job Retention Scheme page.
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Charlotte is a Senior PR & Communications specialist at iwoca. She's been sharing news and insights about the finance industry for over three years.
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