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Furlough Scheme changes September 2020

Source: HM Revenue & Customs | | 16/09/2020

As our readers will no doubt be aware, the Coronavirus Job Retention Scheme (CJRS) is closing on 31 October 2020. The scheme moved to a more flexible working arrangement from 1 July 2020 to allow employees to resume part-time working and to begin to ease employers away from their reliance on the scheme.

These changes continued with effect from 1 September when government support for the scheme was reduced from 80% to 70% of usual wages up to a cap of £2,187.50 per month for the hours furloughed employees do not work. Employees will also have to continue to cover employers’ NIC and pension costs for the hours the employee does not work. From October 2020, the government support for the scheme will be reduced further to 60%, with state support for furloughed workers reduced to a maximum of £1,875 with the same rules for NIC and pension costs.

Since the furlough scheme was introduced, many employers have been topping up the government support payments. Employers can of course continue to top up employee wages above the relevant percentage caps for the hours not worked at their own expense. This is obviously becoming more expensive as government support for the scheme tapers off. Employers have to pay their employees for the hours worked as normal.

Once the furlough scheme ends, a new Job Retention Bonus will start. The bonus payment has been designed to help encourage employers to bring back furloughed workers. The new bonus scheme will provide a £1,000 bonus payment to employers that bring back an employee that was furloughed, and continuously employ them for at least 3 months after the end of the CJRS..



 

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