cheap accountants - Covid-19

In this article we will address and outline the reductions to the Government’s Furlough Grant otherwise known as the Coronavirus Job Retention Scheme (CJRS). The grant has been a major lifeline for a large number of employees during the Covid-19 pandemic and has ensured that employers across the UK can afford to pay employee wages rather than making employees redundant. Current Government figures indicate that more than 9.3 millions jobs have been protected by this grant scheme.

We previously blogged about the CJRS changes in full and how the extension to the grant will operate. This article will focus on the September changes only.

Government contribution cut to 70% – Employers must pay 10%

From the 1st of September 2020 the Government will now only pay to employers 70% of an employees usual monthly wage or salary. What all employers must remember here is that the employee must still be paid at least 80% of their normal monthly wage with the employer picking up the tab for the remaining 10%.

The Government have now reduced the furlough grant cap to £2,187.50 down from the previous cap of £2,500 a month.

Employer pay Pension costs and NI costs

Employers could previously claim for the cost of employer pension contributions as well as employer National Insurance charges. This is no-longer the case. This change was actually introduced during August and continues into September. So employers can no-longer claim for either of these during September.

Flexible Furlough

Employers can continue to bring employees back into the work place on a part-time basis and then claim the furlough grant for the remainder of the time not worked. If an employee is brought back to work for an employer for 50% of their normal working week then the furlough grant can be claimed for the remaining 50% of the week not worked.

All employers need to remember that they cannot claim for any hours that an employee works.

Claim Criteria

There is no change to the claim criteria and all employers who haven’t previously met this criteria will not be able to claim moving forward. To claim the furlough grant during September the employee must have been furloughed with the grant claimed prior to July. The grant scheme is very much closed for new entrants and employers should be aware of this despite their current circumstances.

We do feel for any clients who are finding it tough right now and we are always here to assist with any questions or queries any clients have in relation to any of the Government support packages.

Quick Recap

  1. The Furlough Grant has now been reduced to 70% of the normal monthly wage
  2. The employer must now pay 10% of the normal monthly wage
  3. Employer pension contributions and NI charges must be paid in full by the employer