Changes to the Coronavirus Job Retention Scheme (CJRS) from July
The current level of the Coronavirus Job Retention Scheme (CJRS) grant will be reduced From 1 July 2021. Employers will then be asked to contribute towards the cost of their furloughed employees‘ wages.
The UK Government will continue to pay 80% of your furloughed employees’ usual wages for any hours not worked. This will be capped at £2,500 per month, and run until the end of June.
What happens after 1 July?
In July, CJRS grants will cover 70% of employees’ usual wages for the hours not worked. This will be to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875.
You will need to pay the 10% difference in July, and 20% in August and September. This will allow you to pay any furloughed employees at least 80% of their usual wages for the hours they do not work during this time. It will be capped up at £2,500 per month.
For the hours not worked, you can top up your employees’ wages above the 80% level or cap each month if you wish. However, this will be at your own expense.
You can claim before, during or after you process your payroll. It is best to make a claim once you are sure of the exact number of hours your employees worked, so you do not have to amend your claim later.
Conditions of claiming CJRS grants
You must pay the associated employee tax and National Insurance contributions to HMRC. This is a condition of claiming the grant, and not doing so will mean you will need to repay the whole of the CJRS grant. You may not be able to claim future CJRS grants.
Flexibly furloughing employees
If your business continues to be affected by coronavirus, you do not need to place all your employees on full furlough. You can also use the CJRS flexibly if you bring your employees back to work for some of their usual hours. You can claim a portion of your employee’s usual wage costs for the hours spent on furlough only.
As a reminder, you must not claim under the CJRS for any hours that your employees work. HMRC are carrying out compliance checks to identify error and fraud in claims.