Important updates to the Job Retention Scheme
From Thursday this week, employers across the UK will have to make a final further furlough contribution as the Government prepares to close the scheme at the end of October.
Furlough pay is set to fall from 70% to 60% on top of national insurance and workplace pension top-ups as the Government reduces the contribution for a final time.
Changes from October 1
- From October, the Government will pay 60% of wages up to a cap of £1,875
- Employers will have to pay national insurance contributions, pension contributions and 20% of wages – up to £625 in wage top-ups per employee – for time they are furloughed to take the total to 80% (or £2,500)
Employers will continue to be able to choose to top up employee wages above the 80% total and £2,500 cap for the hours not worked at their own expense if they wish.
If employers or taxpayers have claimed too much for a CJRS grant and have not repaid it, they must notify HMRC and repay the money by the latest of whichever date applies below:
- By October 20, 2020
- 90 days after the date you received the grant you were not entitled to
- 90 days after the date you received the grant that you were not longer entitled to keep because your circumstances changed
The 90-day period to inform HMRC of any over claimed amounts is now law, where employers discover an error which has resulted in an overclaim of the amount due under the Job Retention Scheme, they should report this to HMRC on their next claim or face a penalty.
Job Support Scheme
Chancellor Rishi Sunak last week announced a new Job Support Scheme to succeed furlough, which will allow employers to keep employees in a job on shorter hours rather than making them redundant.
The scheme will directly support the wages of people in viable jobs working at least a third of their normal hours and will run for six months and begin in November. The Government will increase people’s wages by covering 2/3 of pay they have lost by reducing their working hours.
Job Retention Bonus
Employers will receive a one-off payment of £1,000 for every employee who has previously been furloughed under the Coronavirus Job Retention Scheme – if they remain continuously employed to the end of January 2021.