FURLOUGH A-Z

Updated: Jul 1

The CJRS is being extended until September 2021. The government will pay 80% of wages up to a cap of £2,500.


The CJRS is being extended until September 2021. The government will pay 80% of wages up to a cap of £2,500.



If you cannot maintain your workforce because your operations have been affected by coronavirus (COVID-19), you can furlough employees and apply for a grant to cover a portion of their usual monthly wage costs where you record them as being on furlough.



  • From July 1 2021 the employer will also pay 10% of hours not worked


  • In August and September the employer will also pay 20% of hours not worked


  • Flexible furloughing will be allowed in addition to full-time furloughing.


  • This extended Job Retention Scheme will operate as the previous scheme did, with businesses being paid upfront to cover wages cost



For periods starting on or after 1 May 2021, you can claim for employees who were employed on 2 March 2021, as long as you have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying a payment of earnings for that employee. You do not need to have previously claimed for an employee before the 2 March 2021 to claim for periods starting on or after 1 May 2021.



For periods ending on or before 30 June 2021 you can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month. From 1 July 2021, the level of grant will be reduced each month and you will be asked to contribute towards the cost of your furloughed employees’ wages.



You do not need to have previously claimed for an employee before the 2 March 2021 to claim.


Employers can furlough employees for any amount of time and any work pattern, while still being able to claim the grant for the hours not worked.


You will need to pay for employer National Insurance contributions and pension costs. Find out more information on employer contributions to the Coronavirus Job Retention Scheme.



If you’ve already worked out how much you can claim, you can claim for wages online through the Coronavirus Job Retention Scheme.


HMRC will check claims. Payments may be withheld or need to be paid back if a claim is found to be fraudulent or based on incorrect information. You can report suspected fraud in the Coronavirus Job Retention scheme.



Coronavirus Job Retention Scheme grants are not classed as state aid.




The next step for employers (where relevant) will be to notify their staff that they are aware of this extension to the scheme, making clear that further information will be communicated to applicable staff in due course and, where appropriate, updated furlough letters will be provided.


In particular, employers will need to review the letters they have sent to furloughed staff in the past to see whether those letters refer to a specific end date for furlough, or state more generally that furlough will continue until the end of the scheme.



Please have a read through the summary, or check the specific information which is broken into handy sections, which should give you what you need to know.


Please do bear with us as you can imagine there will a very high volume of customers to respond to and we will get back to you as soon as possible.


The way to get the swiftest answer to what you need to know will be to look through the guide before calling.


If you need additional clarification, please call 01995 600 600 and ask to speak to our payroll team of Joan, Karen or Kate or email covid19@tagac.co.uk.


FURLOUGH LETTER TEMPLATES TO DOWNLOAD


Legally, all staff for whom you intend to claim furlough on the extended scheme must have been provided a retrospective letter of agreement. You can download the template for those letters below, personalise it with their details then email accordingly.



Flexible furlough agreement letter

A letter for employers explaining the terms of a flexible furlough agreement to employees. format.

Furlough agreement letter

A letter for employers explaining the terms of a furlough agreement to employees who are put on furlough for the first time.

Extension of furlough agreement letter

A letter for employers extending the terms of a furlough agreement.

Ending furlough agreement letter

A letter for employers ending a furlough agreement with employees so they can return to work.



CONTENTS


SUMMARY


CHECK YOUR EMPLOYER CAN USE JRS


CHECK IF EMPLOYEES CAN BE FURLOUGHED


CLAIM WAGES THROUGH THE JRS


CALCULATE HOW MUCH TO CLAIM


STEPS TO TAKE BEFORE CALCULATING YOUR CLAIM

CHECK IF YOU CAN CLAIM YOUR EMPLOYEES WAGES



SUMMARY


  • The extended Job Retention Scheme will operate as the previous scheme did, with businesses being paid upfront to cover wages costs. There will be a short period to change the legal terms of the scheme and update the system and businesses will be paid in arrears for that period.

  • The CJRS is being extended until September 30 2021.

  • Employers will have to pay the employee’s wages for the hours they work as normal, as well as employer National Insurance and employer pension contributions.

  • As under the previous CJRS, flexible furloughing will be allowed in addition to full-time furloughing.


WHO IS ELIGIBLE?


EMPLOYERS

  • All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.

  • The government expects that publicly funded organisations will not use the scheme, as has already been the case for CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted. All other eligibility requirements apply to these employers.


As under the previous CJRS rules : -

  • Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees.

  • Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Such calculations will broadly follow the same methodology as previously under the CJRS.

  • When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days.

  • Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.

  • For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.



SUPPORT PROVIDED AND EMPLOYER COSTS

  • For hours not worked by the employee, the government will pay 70% of wages up to a cap of £2,500. The grant must be paid to the employee in full.

  • Employers will pay employer NICs and pension contributions, 10% of hours not worked in July and 20% in August and September 21 and should continue to pay the employee for hours worked in the normal way.

  • As with the current CJRS, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.



CHECK YOUR EMPLOYER CAN USE JRS


Find out if you’re eligible, and how much your employer can claim if they put you on temporary leave ('furlough') because of coronavirus (COVID-19).

  1. Check if you’re eligible

  2. How much you’ll get

  3. While you’re on furlough

  4. Report fraud to HMRC

  5. If you do not want to go on furlough

  6. Guidance for specific customers

  7. Contacting HMRC


CHECK IF EMPLOYEES CAN BE FURLOUGHED


Find out which employees you can put on furlough and claim for through the Coronavirus Job Retention Scheme.

  1. Check how different employment conditions affect eligibility

  2. If your employee has more than one job or other duties

  3. If you’ve made your employees redundant

  4. If your employee’s health has been affected by coronavirus (COVID-19) or any other conditions

  5. If your employee is on or has recently returned from leave

  6. If you’re claiming for an individual that’s not an employee

  7. After you’ve checked which employees you can claim for



CLAIM WAGES THROUGH THE JRS


Claim for some of your employee’s wages if you have put them on furlough or flexible furlough because of coronavirus (COVID-19).

  1. What you’ll need

  2. How to claim

  3. After you’ve claimed

  4. If you have not claimed enough

  5. Contacting HMRC


CALCULATE HOW MUCH TO CLAIM

Calculate how much you have to pay your furloughed employees for hours on furlough, how much you can claim for employer NICs and pension contributions and how much you can claim back.

  1. Record keeping requirements

  2. Use the calculator

  3. Work out the maximum wage amount

  4. Work out 80% of your employee’s usual wage

  5. Work out how much you can claim for employer National Insurance contributions

  6. Work out how much you can claim for employer’s pension contributions

  7. How to claim

  8. Contacting HMRC


STEPS TO TAKE BEFORE CALCULATING YOUR CLAIM


Find out what steps you need to take before you calculate how much you can claim for furloughed and flexibly furloughed employees.

  1. Deciding the length of your claim period

  2. What to include when calculating wages

  3. Work out your employee’s usual hours and furloughed hours

  4. What to do next

CHECK IF YOU CAN CLAIM YOUR EMPLOYEES WAGES


Find out if you’re eligible and how much you can claim to cover wages for employees on temporary leave ('furlough') due to coronavirus (COVID-19).

  1. Who can claim

  2. Employees you can claim for

  3. Agreeing to furlough employees

  4. When your employees are on furlough

  5. Before you claim

  6. Contacting HMRC


FURLOUGH LETTER TEMPLATES TO DOWNLOAD


Flexible furlough agreement letter

A letter for employers explaining the terms of a flexible furlough agreement to employees. format.

Furlough agreement letter

A letter for employers explaining the terms of a furlough agreement to employees who are put on furlough for the first time.

Extension of furlough agreement letter

A letter for employers extending the terms of a furlough agreement.

Ending furlough agreement letter

A letter for employers ending a furlough agreement with employees so they can return to work.

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