Chancellor Rishi Sunak announced last week that the CJRS has been extended until 31 October 2020 but has advised that there will be some changes to the way the scheme currently works as he will be looking for more of the responsibility to shift back to employers as some businesses are starting to re-open following the Government's announcement on 28 May 2020.
The main points that will change are as follows:
- Employers will not be able to place employees on furlough after 10 June 2020, and so that will become the cut-off date;
- From 1 July 2020, the CJRS will support businesses in bringing employees back to work and this means that employees will be able to work part-time and be furloughed part-time. It will be for the employer to decide how this will take place and the time apportionment;
- As of 1 August 2020, employer's will be required to pay their employees' national insurance contributions and pension contributions and will no longer be able to reclaim for those under the CJRS;
- The contribution from the CJRS will be reduced to 70% from 1 September 2020 (up to a maximum of £2,190) which will leave employers required to top up to the 80% previously paid (or, the full salary depending on what has been agreed with the employees when they were placed on furlough); and
- A further reduction to 60% will come into effect from 1 October 2020 (up to a maximum of £1,875) with employers expected to continue the top up as above.
It will also be welcome news for those who are self-employed as the grant is also being extended in similar lines to the CJRS and applications will open in August for the second and final grant that is expected to be in line with the reduced CJRS and it would pay 70% of average earnings up to a maximum of £6,750.
We appreciate that these changes may be concerning to some individuals or businesses who are planning ahead and looking to re-open when possible.
Our expert team remains available to help and support both new and existing clients and we continue to offer our 30 MINUTES FREE CONSULTATION so please do not hesitate to contact us via e-mail, on 01245 228141 or via the contact box on our website.