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Coronavirus Job Retention Scheme Extended to September

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The Coronavirus job Retention Scheme (CJRS) has been extended again from June until the end of September 2021.
The UK government will continue to pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month. The cap affects anyone on an annual salary of £37,500 or more.

From July 2021 CJRS grants will reduce to cover 70% of employees’ usual wages for the hours not worked, up to a cap of £2,187.50. Employers will need to continue to pay their furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month. They also need to pay the associated Employer National Insurance contributions and pension contributions on subsidised furlough pay from their own funds.

In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875. Employers will need to continue to pay their furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month. They also need to pay the associated Employer National Insurance contributions and pension contributions on subsidised furlough pay from their own funds.

When claiming for periods from 1 May 2021 onwards, eligible employees must have been employed on 2 March 2021 and had a Real Time Information (RTI) submission to HMRC notifying a payment of earnings for that employee by their employer between 20 March 2020 and 2 March 2021. You can find out more about the CJRS on GOV.UK.

Employment Law Changes from April 2021

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The employment law changes from April 2021 that will affect your payroll are as follows:

Annual free pay allowance increasing from £12500 to £12570 meaning the standard tax code will be 1257L.
The 20% basic rate for tax banding increases from £37500 to £37700.

The National Insurance weekly earnings limit for employees is £184.00 and £170 for employers.
The National Insurance monthly earnings limit for employees is £797.00 and £737 for employers.

National Minimum Wage Rates:
Under 18 year olds increases from £4.55 to £4.62 per hour
18-20 year olds increases from £6.45 to £6.56 per hour
21-22 year olds increases from £8.20 to £8.36 per hour
23-24 year olds increases from £8.20 to £8.91 per hour
The National Living Wage from £8.72 (over 25s) to £8.91 (over 23s)

Statutory Rates:
Statutory Sick Pay increases to £96.35 per week
Statutory Maternity/Adoption/Paternity Pay increases to £151.97 per week

Coronavirus Job Retention Scheme Extended

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In light of the increased restrictions needed to curb the coronavirus pandemic, the government have extended the Coronavirus Job Retention scheme (CJRS) that was originally due to end 31st October 2020. CJRS has been extended to 31 March for all parts of the UK.

• From 1st November, the UK Government will pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month. The UK Government will review the policy in January. Employers must continue to pay all employers National Insurance and pension contributions. Employers can choose to top up their furloughed employees’ pay beyond the 80% but they are not required to do so.

• Employers and their employees do not need to have used the scheme before to claim for periods from 1 November. Go to GOV.UK for full eligibility criteria.
• HMRC intend to publish details of employers who use the scheme for claim periods from December, and employees will be able to find out if their employer has claimed for them under the scheme.
• There are now monthly deadlines for claims. Claims for period on or after 1st November must be submitted within 14 calendar days after the month they relate to, unless this falls on a weekend in which case the deadline is the next weekday. Claims for periods up to 31 October will not be accepted after 30 November.
• You can claim for employees who were on your payroll on 30th October 2020 and included in an RTI submission to HMRC between 20th March and 30th October 2020. If employees were on your payroll and included in an RTI submission on or before 23rd September and were made redundant or stopped working for you, they can also qualify for the scheme if you re-employ them.
• You must agree working hours with your employees you wish to furlough and agree any changes to their employment contact.
• You cannot claim for more employees than you have previously claimed for.
• The Job Retention Bonus will no longer be paid in February 2021 and an alternative retention incentive will be put in place at the appropriate time.
• The launch of the Job Support Scheme due to start 1st November has also been postponed.

For help with your furlough calculations please click here for the Job Retention Scheme Calculator.

Employers will need to keep the records that support the amount of CJRS grant they claim, in case HMRC need to check it. Employers and authorised agents can view, print or download copies of previously submitted claims by logging onto their CJRS service on GOV.UK.

The New COVID-19 Job Support Scheme

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With the end of the Coronavirus Job Retention Scheme on 31st October, the New COVID-19 Job Support Scheme starts on 1st November 2020 and will run for 6 months until April 2021 for SMEs (less than 250 employees). The Job Support Scheme is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to COVID-19, to help keep their employees attached to the workforce. The company will continue to pay employees for time worked, but the burden of hours not worked will be split 3 ways between the employer, the government (through wage support) and the employee (through a wage reduction) and the employee will keep their job. This means that employees will receive at least two thirds of their usual wages for the hours not worked. Neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme.

To qualify, employees must be on the payroll on or before 23rd September 2020 and work at least 33% of their usual hours. Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short-term working arrangement must cover a minimum period of 7 days. Employers must agree the new short-time working arrangement with their staff, make any changes to the employment contract by agreement, and notify the employee in writing.

For every hour not worked by the employee, both the Government and employer will pay a third each of the usual hourly wage for that employee. The Government contribution will be capped at £697.92 per month. Grants will be made in arrears, reimbursing the employer for the Government’s contribution. The grant will not cover employer NIC or pension contributions. Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.

Employers will be able to make a claim online through Gov.UK from December 2020. Grants will be payable in arrears meaning that a claim can only be submitted in respect of a given period, after payment to the employee has been made and that payment has been reported to HMRC via an RTI return.

Furlough changes from August

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The government have announced that Furlough will not be extended beyond October, but there are changes to the furlough scheme coming into force from this month.

Over 9.3 million workers have been placed on the furlough scheme, which has seen the government cover 80% of wages up to £2,500 a month, since its launch in March 2020. The initiative closed to new workers in June but those still on it can continue to get government funding until 31st October 2020.

FURLOUGH CHANGES FROM AUGUST:
From 1st August, employers must now pick up the bill for all employers National Insurance and pension costs from now on. This represents about 5% of employment costs for businesses. The government will continue to pay 80% of staff wages up to the £2500 a month cap.


FURLOUGH CHANGES FROM SEPTEMBER:
In September, the government’s contribution will fall to 70% of wages up to a cap of £2187.50 a month. This means employers will have to pay 10% of salaries to make up 80% of wages in total up to a cap of £2500. Employers will also need to continue to pay NI and pension contributions. For the average claim, this represents 14% of the employment costs.


FURLOUGH CHANGES FROM OCTOBER:
In October, the government’s contribution will fall again to 60% of wages up to a cap of £1875 a month. This means businesses will have to pay 20% of salaries to make up 80% of wages in total up to a cap of £2500. Employers will also need to continue to pay NI and pension contributions. It means employers footing the bill for 23% of employment costs.

The scheme will then end on October 31st.