It’s been a long three months since the word ‘furlough’ first entered everyday vocabulary and as the UK slowly emerges from lockdown, the Coronavirus Job Retention scheme, or CJRS, also begins to taper. The last date to register an employee for the CJRS has now passed, and from 1 July, employers will be able to bring furloughed employees back into the workplace for any number of hours and shift patterns.
However, employers will now be eligible for covering some of the costs as the scheme begins to wind up. While around 50% of employers have voluntarily been topping up the furlough payments, from 1 August employers will have to cover the national insurance and pension contributions of their employees, currently estimated at 5% of employment costs. September will see government support falling to 70%, followed by a further drop to 60% in October, after which the scheme will end. If you’re looking for more facts and figures on how this will affect your business, the CIPD has a comprehensive article here.
One way to ensure that your employees remain engaged during the post lockdown startup is to bring them back on variable hours or flexi-time. But how do you work out how much to claim from HMRC?
The first step is to establish how often you pay your employees, this could be monthly, every four weeks or weekly. As a general rule, claims cannot be submitted for less than a one week period although exceptions do apply. From there, work out how many hours your employees work. HMRC has an online tool, but for variable or zero-hours employees, it can also be useful to look at their average over the previous tax year.
If you are considering furloughing staff under this second scheme, remember that legally they need to receive a letter informing them of this (even if they have been furloughed using the first scheme). If you are using an accountant to submit your claims, make sure you have a plan in place with them as to how you will note employees’ hours and how and when you will report these to your accountant.
There is currently no deadline to submit claims under this second scheme, however, it is widely anticipated to be 30th November.
If you need any help or advice with the second stage of the Coronavirus Job Retention Scheme, get in touch to see how we can help on email@smithbutler.co.uk or call us on 01274 588115.