Corona Virus Job Retention Scheme

Jun 04 2020

The scheme is being extended to run until 31st October (instead of ending on 30th June), there is a new key caveat – namely that an employee can only be furloughed on/after 1st July IF already furloughed prior to 30th June. In practice this means that the ‘closing date’ for putting a previously unfurloughed worker onto furlough is 10th June (so that a minimum period of 3 weeks has been completed before 1st July)!
Although not stated explicitly the above means that as well as no worker being allowed to be‘newly’ furloughed on/after 1st July, it appears to mean also that any furloughed worker who ceases to be furloughed after that date cannot then be put back onto furlough at a later date.

The rules for the extended version of the scheme actually change each month:

From 1st July, employers will be able to agree any working arrangements with previously furloughed employees - i.e. whilst remaining furloughed the employee will be allowed to work pre-agreed part-time hours (with those hours of course being paid in full by the employer). Any hours remaining in a month that the employee would normally have worked (after deducting the hours actually worked) will continue to be paid as per current scheme (i.e. a minimum of 80% of normal wages subject to a cap of £2,500 all of which can be reclaimed from HMRC).

Although not stated explicitly, it is presumed that the cap value will be pro-rated in line with the furloughed hours being claimed as a percentage of the normal hours that would otherwise have been worked.
It isalso not yet clear whether the hours agreed with a particular employee can vary (either within a roster that may span several weeks or merely because it becomes apparent that more/fewer hours are actually needed).
One impact of this new flexibility is that the claim will (in ways not yet specified) have to include two new data items for each furloughed worker - the usual hours that the employee would have been expected to work in a claim period, and the actual hours worked.


From 1st July, claim periods will no longer be able to overlap months (i.e. employers who previously submitted claims with periods that overlapped calendar months will no longer be able to do this going forward).From this point onwards whole calendar months only are viable for submission. How this will work for Weekly payrolls is not yet explained but is likely to require pro-rating of one week’s figures each month (because the reclaim rules are different each calendar month). One impact of this is that Employers will only have until 31st July to make any claims in respect of the period to 30th June.

From 1st August, although employers will still be able to re-claim the same proportion of wages, they will no longer be able to reclaim any ER NICs or pension contributions.

From 1st September, the employer will only be able to reclaim a maximum of 70% of normal wages subject to a cap of £2,187.50 - although the employee must still be paid a minimum of 80% of normal wages subject to a cap of £2,500 (i.e. the employer is now paying at least 10% of the normal wages, plus ER NICs and pension contributions).

From 1st October, the employer will only be able to reclaim a maximum of 60% of normal wages subject to a cap of £1,875 - although the employee must still be paid a minimum of 80% of normal wages subject to a cap of £2,500 (i.e. the employer is now paying at least 20% of the normal wages, plus ER NICs and pension contributions).

From 1st November, unless there is a further extension of some sort the scheme will hit the buffers (i.e. it will cease to exist).

Items that require further clarification.The items below which support an employer in making decisions and calculations are in need of further clarification from the government:

  • How and where to record the two new data items (for any furloughed employees);
  • How to calculate the gross pay of an individual who is a hybrid furloughed/part-time worker, and how to calculate the reclaim values;

As this becomes clear we will introduce reports and methodologiesto assist in as much of this as we can.

Items for your early consideration.

  • Which if any employees to furlough for the first time by/before 10th June?”.
  • Which if any of the furloughed employees are to be offered a partial return to work (and for what hours, from when);
  • How to model the one-way gradual increase in employment liabilities andcosts, and the resultant need for investment and/or redundancies.

There is not a lot of published information on the changes, we have sourcedall the above from a mixture of places and the press release on GOV.UK at:
https://www.gov.uk/government/news/chancellor-extends-self-employment-support-scheme-and-confirms-furlough-next-steps
plus a draft factsheet on:
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/888764/Factsheet_for_SEISS_and_CJRS_schemes.pdf

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