June 15, 2020: Wheelers Words

Wheelers Words banner

June 15, 2020 | Latest updates on COVID-19 Support

CJRS Scheme update

Further to our last update HMRC have now released further details on how the scheme will work from 1 July. Only employees who you have claimed for prior to this date can be furloughed after 1 July. The claim window for employers closes on 31 July for all furlough claims up to 30 June. The maximum number of employees claimed for after 1 July cannot exceed the number claimed for prior to 30 June (except if an employee is returning from parental pay).

Employees working reduced hours

From 1st July, provided the employee has been furloughed before they may be able to work reduced hours and the hours not worked claimed as furlough. Examples on how to calculate can be found at:

https://www.gov.uk/government/publications/find-examples-to-help-you-work-out-80-of-your-employees-wages/examples-of-how-to-work-out-80-of-your-employees-wages-national-insurance-contributions-and-pension-contributions#nics-fully-furloughed

Level of funding

As previously reported the level of funding for furloughed staff will be reduced from 1st August from the current maximum which is £2,500 (80% of £3,125) per month plus Employers NIC and Pension.

From 1st August – no claim for Employers NIC or Pension contributions

From 1st September - no claim for Employers NIC or Pension contributions and reduced rate to 70% of gross pay

From 1st October - no claim for Employers NIC or Pension contributions and reduced rate to 60% of gross pay

When the CJRS ends

The Scheme ends at the end of October, the employer must the decide whether employees return to normal hours, reduce them or even terminate employment (redundancy). Normal redundancy rules will apply if you decide to terminate employment when the furlough period has ended.

CJRS and its link to holiday

A worker continues to accrue holiday entitlement whether they are on sick leave, parental leave or even furlough. During a period of furlough pay an employer can insist that a worker takes holiday provided a notice period of double the amount of time they wish the worker to take off as holiday has been given. Without disrupting a period of furlough as an employer you can give notice that a worker must take holiday, however the furlough pay (currently 80%) must be topped up to normal pay and the difference in cost must be met by the Employer. With the rates that can be reclaimed set to reduce over the coming months it might be worth considering workers takin some of their annual leave before the end of June in order to get the maximum contribution towards the payment of it.

It is worth thinking about how much holiday furloughed workers will have accrued and need to take off once they return from furlough. This may cause enormous problems if several workers all have holiday they need to take within a smaller window. It has been announced that Employers must allow the holiday to be carried forward into future holiday years if certain factors are met.

Old CJRS can now be amended

HMRC have now updated the claim process so that old overclaims can be adjusted when you make the next claim. This only works for overclaims when you have still got employees furloughed, there is still no way of paying back an earlier overclaim if you are not making a future claim – we are told this is now in development. In addition, if you have underclaimed there is still no method of adding to an original claim.

Additional discretionary capital grant

There is capital funding available to small businesses in the CPCA area which covers Cambridge City, South Cambridgeshire, Huntingdonshire, Fenland, East Cambridgeshire, Rutland, West Suffolk, North Hertfordshire, Uttlesford, Lincolnshire - South Kesteven and South Holland, Kings Lynn and West Norfolk. Grants of between £2,000 and £150,000 available towards a project cost which is also linked to job retention/creation. Further information at: 

https://cambridgeshirepeterborough-ca.gov.uk/business-board/covid-19-capital-grant-scheme/

Other news – Construction Industry Reverse charge VAT

HMRC have advised that this has been further delayed and will now not be implemented until 31 March 2021, a sigh of relief for many businesses in that sector who are already busy dealing with trying to get their business operational again after the Corona Virus pandemic.