CJRS and Flexible Furlough From 1st July 2020

CJRS and Flexible Furlough From 1st July 2020

The Coronavirus Job Retention Scheme (CJRS) is changing from 1 July to encourage those furloughed back into work.
 
The grant scheme enters its second phase on 1 July 2020 and covers claims for employees furloughed from that date until the scheme ends on 31 October 2020.
 
The second phase allows previously furloughed employees to come back to work on a flexible part-time basis. It requires employers to cover the costs of the working hours of part-furloughed staff and also over a phased period to pay for some of the furlough claim while ensuring that furloughed employees continue to receive up to 80% of their pay up to £ 2,500 per month pro-rated for the period that they do not work.
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The CJRS falls into two distinct parts with different rules applying.


CJRS V1: 1 March 2020 to 30 June 2020

  • Employees must be fully furloughed and no work is allowed.
  • Minimum furlough period for each employee is 21 consecutive days.
  • No new employee can be admitted to the scheme after 30 June. This, combined with 30 June end date to CJRS V1, means the last date on which an employee can begin a period of furlough leave for the first time is 10 June.
  • 31 July is the final date for submitting claims under CJRS V1.

CJRS V2: 1 July 2020 to 31 October 2020

  • From 1 July the scheme is only available to employers that have used CJRS V1 and only for employees they have previously furloughed. Employees can be flexibly furloughed, enabling part-time working.
  • No minimum furlough period required.
  • Furlough claims become more specific and must contain details of usual hours (based on calendar days) and usual hours worked. Hours furloughed will be the difference.
  • Each claim made by employer must be for a week or more.
  • No claim period can extend across a calendar month end.

What is Flexible Furlough?

CJRS V2 claims 

Which Employers and Employees are covered?

Employers
An employer must have accessed the scheme under CJRS V1 to claim under CJRS V2. This means that effectively the scheme is closed to new employer entrants after 30 June 2020. Employers have until 31 July to make all outstanding claims for periods up to 30 June, on which date CJRS V1 closes. This final claim also gives an opportunity for some employers to set a new maximum number of claims to carry forward into CJRS V2.

Employees
From 1 July onwards, employers can only furlough employees who are already in the scheme; that is those who have completed at least one full consecutive 21 day period prior to 30 June. The effect of this is that an employee cannot be furloughed for the first time after 10 June.

The qualifying 21 day furlough period does not need to be the last 21 days in June.

It can have been any 21 day furlough period claimed for under CJRS V1.

Where a CJRS V1 21 day furlough period spans 30 June, the entire period qualifies for the grant, but flexibility can only start after the 21 days have elapsed.

The only exception to the prior qualification rule announced so far, allows claims for employees who are now returning to work after a period of parental leave, who might not have been furloughed previously. For example, some women may have been furloughed during their maternity leave and employers may have been claiming grants for enhanced contractual maternity pay. Others may not. It is these who can now be brought into CJRS V2 for the first time. 

To claim
Claims for flexible furlough will now also have to include number of hours furloughed, as opposed to hours the employee is expected to work in the claim period. For example, an employee contracted for a 35-hour week may agree to a flexible furlough to work two days a week: 35 usual hours and 14 working hours would be reported.

As before, to claim for 100 or more furloughed employees, a file will be uploaded containing the following for each employee:

  • Full name;
  • National Insurance number;
  • Payroll number (optional);
  • Furlough start date;
  • Furlough end date (if known); and
  • Full amount claimed.

And also, for flexibly furloughed employees:

  • Hours they actually worked in the claim period; and
  • Usual hours worked in the claim period.

Claims for fewer than 100 employees will still need each employee to be entered into the government system separately. A partial claim can be saved as a draft but must be completed within seven days.

Time limit for submission 
We understand there is to be a new time limit for claims. Any claim for a period in a calendar month must be submitted before the end of the following calendar month.  We await confirmation of this time limit.

Amendments 
Grants overpaid can be repaid by deducting the overpayment from future grants. No further action is needed, but a record of this adjustment should be kept for six years.
A new process is being developed for repaying grants if no further claims are going to be made.
Employers should contact HMRC directly to amend an error that has resulted in an under claim. HMRC is expected to conduct additional checks on these.

Record keeping 
As with any aspect of CJRS, the employer must keep a written agreement confirming the furlough arrangement. Records of these employee agreements must be kept for until 30 June 2025.
On 12 June 2020 HMRC published updated guidance on the CJRS.

Time Line with critical dates

What should Employers do now?
Read the guidance to see how changes to the scheme impact them. There is a calculator available on the Government website to help employers understand how much they will be able to claim.
Consider which employees they want to keep on full-time furlough and which employees will come back to work (on what hours) to agree arrangements with them as needed for the business.

Book a webinar via GOV‌‌.UK if they would like more support: Choose a date and time

Contact us for any guidance or advice.