Coronavirus Job Retention Scheme (CJRS) changes and deadlines from 1st July 2020

Human Capital Advisory

The Government have now issued the detailed guidance on the successor CJRS scheme from 1st July. A lot we knew already, but some of the detail is well worth noting below: 

• You will not be able to claim CJRS payments after 30th June for any employee who has not already been on furlough on or before 10th June 2020.
• All furlough periods that start before 1st July must be for the minimum 3 consecutive weeks e.g. a previously furloughed employee who starts a new furlough period on 22nd June would have to continue for 3 consecutive weeks ending on or after 12th July before being flexibly furloughed.
• Flexible furloughing of employees starts from 1st July onwards and with it you can decide the hours and shift patterns your employees work to suit the needs of your business – you’ll pay your employees’ wages for the time they’re in work and can apply for a job retention scheme grant to cover any of their usual hours they are still furloughed for. You can still keep employees on full furlough if you need to also.
• If you flexibly furlough employees, you’ll need to agree this with them (or reach collective agreements) and keep a new written agreement for the new furlough arrangement, including:
  • Ensuring the agreement is consistent with employment, equality and discrimination laws
  • Keeping a written record of the agreement for six years
  • Keeping records of how many hours your employees work and the number of hours they are furloughed (i.e. not working).
• The cut off for claiming for periods ending on or before 30th June, is 31st July.
• Claim periods starting on or after 1st July must:
  • start and end within the same calendar month, and
  • must last at least 7 days
• You can only claim for a period of fewer than 7 days if:
  • the period you are claiming for includes either the first or last day of the calendar month, and
  • you have already claimed for the period ending immediately before it.
• Wait until you are sure of the exact number of hours worked during the claim period before claiming.

To calculate the number of furloughed hours:

1. Start with your employee’s usual hours.
2. Subtract the number of hours actually worked in the claim period – even if this is different to what you agreed.

• Work out the employee’s usual hours and record this along with the actual hours worked plus furloughed hours for each claim period.
• Work out the usual hours for employees who work variable hours, if either:
• They are not contracted to a fixed number of hours, or
• Their pay depends on the number of hours they work

1. Start with the contracted hours at end of the last pay period on or before 19th March 2020 i.e. 40 hours.
2. Divide by the total number of calendar days in the repeating working pattern i.e. 7 days.
3. Multiply by the number of calendar days in the pay period (or partial pay period) you are claiming for i.e. 31 days.
4. Round up to the next whole number if the outcome isn’t a whole number.

• Where pay varies by the amount of time worked, the number of hours worked will be shown on the employees’ pay-slips (legislation introduced by BEIS in April 2019 (section 8 Employment Rights Act 1996).

Usual hours for employees working variable hours are calculated by:

1. Starting with the hours worked (including paid leave) in the tax year 2019/20 before the employee furloughed, or at the end of the tax year if earlier.
2. Divide by the total number of calendar days employed by you in the tax year 2019/20 until the day before furloughed, or at the end of tax year if earlier.
3. Multiply by the number of calendar days in the pay period (or partial pay period) you are claiming for.
4. Round up to next whole number if the outcome isn’t a whole number.

Download a copy of this latest update below or if you have any queries, or would like to discuss your requirements for the next step, please contact:

Nigel Morris
Employment Tax Director
M: 07718 340634
E: nigel.morris@mhllp.co.uk

Richard Maitland
Employment Tax Partner
T: 07711 373584
E: richard.maitland@mhllp.co.uk