cheap accountants - Covid-19

It’s been a very different couple of months for all of us across the UK during the Coronavirus pandemic and many of us have had to come to terms with a new way of life. Let’s hope that things soon return to normal and we can again start to enjoy some of those luxuries that we once took for granted. Lock down measures are starting to ease around the World and we hope that all clients and their families remain safe and healthy during this further period of transition. We have been working overtime during the last couple of months here at Cheaper Accountant to ensure that all clients are responded to promptly and without delay. We do understand the need for clients to access Government grant funds, where these are available, and we continue to do our upmost to ensure that no client is overlooked.

CJRS Extension

The good news is that the Chancellor has announced an extension to the Coronavirus Job Retention Scheme (CJRS) to October. This is when the scheme is now expected to end. The scheme has been made somewhat more flexible allowing employees to gradually return to work whilst still qualify for the Government grant.

CJRS Changes

There are three main announcements here that are worth noting:

1. From 01 July 2020 employees who have been furloughed will be permitted to return to work part time and still receive a grant for the period that isn’t worked.

2. From 01 August 2020 all employers will start to contribute to the wage costs of all furloughed employees. This will increase month-on-month during September and October.

3. The CJRS scheme will close to new entrants from 30 June 2020.

Part Time Furlough Employees

The Government is keen to see employees return back to work and as such all furloughed employees that return to work on a part time basis, from 01 July 2020, will continue to be funded by 80% of wage costs for the normal full time hours not worked.

The above will continue until the end of August 2020.

There is no minimum furlough time here and it is up to the employer to decide what hours should be worked by an employee.

Any working arrangement must be confirmed in writing to the employee.

Changes to the Furlough Grant Claim

When claiming the CJRS grant for furloughed hours an employer will be required to disclose the usual hours that an employee is expected to work as well as the actual hours worked.

If employees cannot return to work, or employers do not have work for them to perform, the employee can remain furloughed and the employer can continue to claim the grant for their full hours under the existing rules.

Employer Contributions

From August the Government will start to taper down the Furlough Grant as follows:

1. From August employers will start to pay 100% of employer NI costs and pension contributions. The Government will continue to pay 80% of wages up to the cap of £2,500 a month.

2. From September the Government will pay 70% of wages up to a cap of £2,187.50 a month. Employers will pay 10% of wages to plug the gap.

3. From October the Government will pay 60% of wages up to a cap of £1,875. Employers will pay 20% of wages to plug the gap.

The cap on the furlough grant will be proportional to the hours not worked. So the above values will be reduced when hours are worked.

Important Dates

The final date for new furloughed employees, or new entrants into the scheme, will be 30 June. However, this is for an employee that has been furloughed for at least three weeks prior to 30 June. So the actual effective date becomes 10 June.

 

We appreciate that there is a lot to take in here. If you are in any doubt about whether or not you qualify for the scheme then feel free to email your cheaper accountant for advice and clarification.