Entering the final furlough

The final stages of the Coronavirus Job Retention Scheme are now being clarified, writes NEIL MOON, Page Kirk's Director of Tax. It's important for businesses to take note of the details.

If you're intending to furlough a new employee under the Coronavirus Job Retention Scheme the deadline is fast approaching.

In fact, there are two deadlines to watch out for.

The first is 10^th June. That's the final day on which you can furlough a staff member who hasn't previously been part of the scheme.

At the end of the month, on 30^th June, we'll reach the point at which furlough applications can only be made for those employees who have already been part of the scheme for at least three weeks previously.

The next change comes at the start of July. From the 1^st of the month, you are able to bring back previously furloughed employees to work as and when you need them. You'll be responsible for paying them in full for the time they are back at work and any new part-time working arrangements must be confirmed in writing to the employee.

New furlough claims must be reported for a minimum of a week, with the option to make claims for longer periods of time. June 12^th is the date to watch out for, with the release of guidance on flexible furloughing and how to calculate the claims.

Employers will need to submit information to HMRC for the hours an employee is expected to work and the actual hours. If an employee is not yet needed back at work, they can remain on furlough.

Bear in mind that from 1^st August, employers have to start paying NI and pension contributions for furloughed workers, even though HMRC will still pick up the bill for up to 80% of the furloughed worker's salary.

In September, HMRC's furlough contributions will be reduced from 80% to 70% and the maximum sum covered will be £2,190 per month, rather than £2,500 as at the moment. Employers will have to pick up the difference, in addition to the NI and pension. Then, in October, the government contribution reduces to 60% and the cap figure becomes £1,875 per month.

We anticipate the winding up of the scheme at this point.

Of course, this is a fast-moving situation and things may change again in the months ahead. At Page Kirk, we'll work hard to provide you with all the latest updates. In the meantime, if you would like help with your Job Retention Scheme applications, please contact a member of our team on 0115 955 5500 or email enquiries@pagekirk.co.uk.