Further changes to the Coronavirus Job Retention Scheme (CJRS) and the Self Employment Income Support Scheme (SEISS) have been announced by the Chancellor. These changes involve how the level of support the government is providing will gradually taper off prior to closure of the schemes, and how employers can start to bring back staff.
The last date an employer can furlough an employee who has not previously been furloughed is 10 June 2020. The CJRS will close to new members on 30 June 2020. After this date, employers will only be able to furlough employees who have already been furloughed for the minimum period of three weeks. The CJRS will close permanently on 31 October 2020.
The CJRS will allow flexible furlough. From 1 July 2020, employers and previously furloughed employees can agree any working pattern between them. Employees must be paid in full for hours worked, but furlough pay will be available for normal hours not worked.
Throughout the CJRS, furloughed employees will be entitled to 80% pay for normal hours not worked, subject to a monthly cap of £2,500.
There will be a gradual tapering of government contributions to furlough pay as follows:
- From 1 August 2020, the government will pay 80% of wages up to £2,500 a month. Employers must pay employer National Insurance contributions (NICs) and employer pension contributions.
- From 1 September 2020, the government will pay 70% of wages up to £2,187.50 a month. To make up the 80% total (subject to the £2,500 cap), employers must pay 10% of wages plus employer NICs and employer pension contributions.
- From 1 October 2020, the government will pay 60% of wages up to £1,875 a month. To make up the 80% total (subject to the £2,500 cap), employers must pay 20% of wages plus employer NICs and employer pension contributions.
It has been confirmed that those eligible for the SEISS will be able to claim a second and final grant in August 2020. This will be worth 70% of their average monthly trading profits, capped at £6,570, and paid in one instalment covering three months' worth of profits.
For further information please contact Robin Williams