PAYE Tutor Updates (SMS)

Flexible Furlough Scheme

All content on this page is correct as of June 2, 2020

On Friday 29 May 2020, the Chancellor Rishi Sunak set out a number of changes to the Coronavirus Job Retention Scheme (CJRS), which will take effect over the coming months.

The Chancellor confirmed that from August 2020 employers will be required to start contributing under the scheme:

  • from August they will have to pay employer’s national insurance and pension contributions;
  • from September they will also have to pay 10% of wage costs; and
  • from October they will have to pay 20% of wage costs.

The CJRS is currently planned to expire at the end of October and the Government has confirmed that it will close to new entrants from 30 June 2020. From that point, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June 2020, meaning the final date by which an employer can furlough an employee for the first time and claim under the scheme will be 10 June 2020.

The Government has also confirmed that part-time working will be allowed under the scheme from 1 July 2020, brought forward from August 2020 as previously announced.

Together with its guidance, HM Treasury has published a factsheet which gives some more detail of how ‘flexible furloughing’ will be implemented. It states that:

  • from 1 July, employers will be able to bring back to work any employees who have previously been furloughed for any amount of time and any shift pattern;
  • the employer will still be able to claim under the CJRS for such employees’ normal hours not worked but will have to pay in full for any hours worked; and
  • the employer will be responsible for tax and employer’s NI contributions on pay for any hours worked.

To be eligible for the grant:

  • employers will have to agree with their  employees any new flexible furloughing arrangement; and
  • confirm that agreement in writing.

Further guidance on flexible furloughing and how employers should calculate claims is due to be provided on 12 June 2020


Latest BREAKING NEWS!

Thursday 16th April 14:00

The senior management staff will be holding a Zoom conference call with tutors.  Look out for your invitation.

Friday 27th March 18:00

‘Public Sector organisations and those who are wholly or partly funded by the public sector

The government does not expect public sector organisations to use the scheme as most will be continuing to provide essential public services.

Where non-public sector employers receive public funding for staff costs, and that funding is continuing, the government expect employers to use that money to continue to pay staff in the usual fashion – and not furlough them.”

Peter’s comments:  We are working with Music Mark and the DfE to see if this applies to music hubs!

Friday 27th March 14:00

What do we pay people who are ‘furloughed workers’?

Based on the government’s early guidance on the scheme, here’s what we know so far:

  • Employers can claim a grant of up to 80% of employees’ ‘wage costs’, up to a cap of £2,500 per month
  • Employers do not have to make up the remaining 20%
  • Employees may also be able to access benefits, including Universal Credit

What we don’t know yet, but we’re waiting for further guidance on:

    • What information the employer will have to provide to HMRC in relation to employees they have designated as ‘furloughed workers’
    • When HMRC’s new online portal will be operational
    • What mechanism will be created for reimbursement (although the Chancellor indicated that he thought monies would come through before the end of April)
    • What can be included in the pay claim
    • How it will be calculated if an employee works variable hours (the Chancellor said that this would be made clear when detailed HMRC guidance is published)
    • Whether this will be taxable

Furlough is a new concept and therefore the rules of what should happen during a period of furlough will depend on full details of the scheme. All we know for a fact is that the employee should do no work for an employer during this period.

  • What if they get a temporary job elsewhere?     We don’t know, but this will no doubt be covered in the scheme. As everything seems to be linked to the PAYE reference, HMRC should be able to track if someone has received pay at the same time a claim was made for reimbursement of furloughed pay. However, the key question is how would this be recovered given that the grant will have been paid to the employer, who probably is unaware of the employee’s other work and should not be penalised for this by recovery of part of the claim. Hopefully, the scheme rules will clarify this.