This is a developing article that will be updated throughout the day. Last updated 1 July 2020 at 9am.

From 1 July 2020, CJRS v1 has been replaced with CJRS v2. It is now possible for previously furloughed employees to work part-time and be furloughed for their non-work time.

We have set up a specialist team to closely monitor all the unfolding developments and gather further details on loans, grants and subsidies to help you navigate your way through these circumstances. For further information, please email your usual Relationship Partner or contact person, or request a call back.

Coronavirus Job Retention Scheme – Key Dates

• Between 1 March and 31 July 2020, employers will be reimbursed 80% of the employee’s regular wage, up to £2,500 per employee, per month, plus the associated Employer NICs and minimum employer pension contributions. Employers are not required to pay anything;
• 10 June 2020 was the last day employers can put employees on furlough, with the scheme closing for new employees on furlough on 30 June. Claims under the initial scheme cannot overlap 30 June.
• As of 1 July 2020 CJRS v1 has been replaced with CJRS v2. Notable changes include:-
  • Employers can only claim for employees who have previously been furloughed between 1 March 2020 and 30 June,
  • There will be a new maximum limit to the number of staff who can be included on a claim. This will be based on the maximum staff ever included in a single claim before 1 July 2020,
  • Previously furloughed employees can return to work on a part-time or flexi-furlough basis (a variation of contract may be required). Employers can still continue to furlough employees on a full time basis, but note the CJRS grant changes, as set out below,
  • Claims must be aligned to calendar month and cannot overlap months,
  • Employees no longer have to be furloughed for a minimum of three weeks,
  • Employees can work for any amount of time and any shift pattern, while the employer can still claim for the hours not worked,
  • The calculations for flexi and part-time furlough is complicated. Employers will need to calculate:- Employees usual hours, (Rules apply for contracted hours and zero/variable hours), Actual hours worked and Furloughed hours worked.
• From 1 August 2020 the withdrawal starts, the government still pays 80% of wages up to £2,500 but employers must now pay employers NICs and employer pension contributions;
• From 1 September 2020, government pays 70% of wages up to a cap of £2,187.50. Employers will be asked to pay 10% towards employees wages plus employers NICs and employer pension contributions;
• From 1 October 2020, government pays 60% of wages up to a cap of £1,875. Employers will be asked to pay 20% towards employees wages plus employers NICs and employer pension contribution, with the scheme ending on 31 October (unless it is further extended).

Coronavirus Job Retention Scheme – Correcting over/under claims

HMRC have confirmed incorrect claims should not be adjusted in the next claim.

To correct an under-claim of the CJRS grant, please call HMRC on the coronavirus technical line: 080 0024 1222. Over-claims can declared as part of (but not included in) the next claim.

Coronavirus Job Retention Scheme – Penalties

The draft legislation, which brings the CJRS grant into the tax system to be taxed as income, also includes provisions that allow HMRC to claw back any coronavirus support payments which were not due. Where directors do not notify HMRC of the over-claim of a CJRS grant, a penalty may be applied under the failure to notify rules, treating the error as deliberate and concealed. This would mean a penalty would be imposed at 30% to 100% of the overpayment if the employer voluntarily disclosed, or 50% to 100% of the overpayment where the disclosure was prompted by HMRC.

Coronavirus Job Retention Scheme – Record Keeping

You must keep a copy of all records for 6 years, including:

• the amount claimed and claim period for each employee
• the claim reference number for your records
• your calculations in case HMRC need more information about your claim
• usual hours worked, including any calculations that were required, for employees you flexibly furloughed
• actual hours worked for employees you flexibly furloughed