Updates to the CJRS were announced by the Chancellor on Friday.
Key Points
The CJRS will close on 31 October 2020.
The Government website advises;
From 1 July, employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS grant for the hours not worked.
From 1 August 2020, the level of grant will be reduced each month.To be eligible for the grant employers must pay furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they are being furloughed.
The timetable for changes to the scheme is set out below. Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours.
Gov.UK 12th June
Timetable For Changes
- The Grant levels remain unchanged for June.
- For June and July, the government will pay 80% of wages up to £2,500 max for the hours the employee is furloughed, in addition to employer National Insurance Contributions (ER NICS) and pension contributions for the hours the employee is furloughed. Employers will have to pay employees for the hours they work.
- For August, the government will pay 80% of wages up to £2,500 max for the hours an employee is furloughed and employers will pay ER NICs and pension contributions for the hours the employee is furloughed.
- For September, the government will pay 70% of wages up to a cap of £2,187.50 max for the hours the employee is furloughed. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a maximum of £2,500, for time they are furloughed.
- For October, the government will pay 60% of wages up to a maximum of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a maximum of £2,500, for time they are furloughed.
Employers will still have the option to top up employee wages above the 80% total and £2,500 cap for the hours not worked at their own expense. Employers will have to pay their employees for the hours worked.
The table below shows the Government contribution, required employer contribution and the amount an employee receives where the employee is furloughed 100% of the time. Wage caps are proportional to the hours not worked.
What Happens If You’ve Submitted A CJRS Over -Claim?
HMRC’s guidance makes it clear that any business that makes an error in making a Coronavirus Job Retention Scheme (CJRS) claim must pay back any amount over-claimed. HMRC can reclaim inaccurate CJRS claims.
The CJRS application claim form has been updated and now allows businesses to advise HMRC if they have identified previous errors and over-claimed. If you confirm that your business has been overpaid, the new claim amount will be reduced to reflect this overpayment.
HMRC has also clarified what will happen if you have made an error in a CJRS claim and do not plan to submit further claims. HMRC is working on a process that will allow employers to let HMRC know about these errors and pay back any amounts that have been over-claimed. HMRC will update their guidance when this option is available.
Employers must pay the full amount they are claiming to their employees, even if the company enters administration. If the employer is unable to pay employees what they are due, the monies will need to be repaid to HMRC. The same applies in relation to employer NICs and pension contributions.
As an employer, it is your duty to ensure that all claims made for furloughed employees are accurate. Employers are required to keep full records relating to any CJRS claims (including adjustments) for a period of six years.
If you need help with any element of Payroll, including CJRS please call MJB Avanti (08000) 388 799
Source: HMRC