Coronavirus (covid-19) job retention scheme (cjrs) [cjrs v2 – extension to 31st october 2020 – additional guidance]

Given the success of the CJRS scheme so far in retaining employees in their employment, and the ongoing effects of the ‘lockdown’ on business activities, the Government announced that the scheme will be extended through to 31st October 2020.

The main changes to the original CJRS scheme applicable to businesses during the extended period (CJRS V2) are that:

– From 1 July 2020 – Employers have the flexibility to bring ‘furloughed’ employees back into the business on a part time basis. Employers will therefore pay for the ‘worked’ hours while still receiving a reimbursement from HMRC for ‘non worked’ hours during the remaining period of the scheme.
– From 1 August 2020 – Employers will have to contribute an increasing amount of ‘furloughed’ employees ‘wages’, Employers NI costs and pension contributions each month

FINANCIAL IMPACT OF CHANGES
(JULY 2020 THROUGH TO OCTOBER 2020)

The update to the scheme means that the following will now apply for Employers in respect of the HMRC reimbursement for employees that are ‘furloughed’:

– During both June and July 2020 – the extended CJRS scheme will continue to operate as per the original scheme (CJRS V1) has operated to date i.e. HMRC will pay 80% of employee wages up to a maximum of £2,500, in addition to Employer NI and pension contributions.
– From 1 July 2020 – Employers can bring back some (or all) ‘furloughed’ employees to undertake work for the business on a ‘flexible’ basis AND STILL claim from HMRC under the CJRS scheme for the hours not worked (with the claim amounts being ‘pro rated’)
– During August 2020 – the extended CJRS scheme will operate with HMRC paying 80% of employee wages up to a maximum of £2,500 per month, BUT Employers will now be required to pay any applicable Employer’s NI costs and pension contributions
– During September 2020 – the extended CJRS scheme will operate with HMRC paying 70% of employee wages up to a maximum of £2,187.50 per month, BUT Employers will now be required to pay 10% of employee wages and any applicable Employer’s NI costs and pension contributions.
NOTE – Employees will still continue to receive 80% of their wage up to a maximum of £2,500 in the payroll run.

– During October 2020, the extended CJRS scheme will operate with HMRC paying 60% of employee wages up to a maximum of £1,875 per month, BUT Employers will now be required to pay 20% of employee wages and any applicable Employer NI costs and pension contributions.

NOTE – Employees will still continue to receive 80% of their wage up to a maximum of £2,500 in the payroll run.

READ FULL GUIDANCE NOTES ON THE LINK BELOW