Neils Limited Chartered Accountants Tel:01442 24 24 91 Hemel Tel:0208 343 6091 London
Neils LimitedChartered AccountantsTel:01442 24 24 91 HemelTel:0208 343 6091 London

FLEXI FURLOUGH AND MORE

 

FURLOUGH   Changes Ahead

 

For periods from 1 November 2020 to 30 April 2021.

 

You can claim for employees who were employed on 30 October 2020, as long as you have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee. You do not need to have previously claimed for an employee before the 30 October 2020 to claim for periods from 1 November 2020.

 

 

For periods starting on or after 1 May 2021, you can claim for employees who were employed on 2 March 2021, as long as you have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying a payment of earnings for that employee. You do not need to have previously claimed for an employee before the 2 March 2021 to claim for periods from starting on or after 1 May 2021.

 

You can claim for employees on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts. Foreign nationals are eligible to be furloughed. Grants under the scheme are not counted as ‘access to public funds’, and you can furlough employees on all categories of visa.

 

For claim periods between 1 November 2020 and 30 April 2021

If you made employees redundant, or they stopped working for you on or after 23 September 2020 you can re-employ them and put them on furlough. This applies as long as the employee was employed by you on 23 September 2020 and you made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.

 

 

 

 

Coronavirus Job Retention Scheme from  1 November  2020

The Coronavirus Job Retention Scheme (CJRS), which was due to end on 31 October, will now be extended, with the UK government paying 80% of wages for the hours furloughed employees do not work, up to a cap of £2,500 for periods from 1 November.

Employers will need to pay all employer National Insurance Contributions (NICs) and pension contributions. They can choose to top up their furloughed employees’ wages beyond the 80% paid by the UK government for hours not worked, but they are not required to do so.

There will be no gap in support between the previously announced end date of CJRS and this extension.

 

How will it work?

You will have flexibility to ask your employees to work on a part-time basis and furlough them for the rest of their usual working hours, or furlough them full-time. You will have to cover their wages for any hours they work as well as all employer National Insurance and employer pension contributions.

You or your clients will be able to claim either shortly before, during or after running your payroll. There will be a short period initially when the online claims service will be closed while we update the system, and you will be able to claim in arrears for that period.

Further details will be provided in the next few days.

How to check if your employees are eligible

Employers can claim for employees who were on their PAYE payroll on 30 October 2020. You  must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March and 30 October 2020, notifying a payment of earnings for that employee.

If employees were on an employers’ payroll on 23 September 2020 (i.e. notified to HMRC on an RTI submission on or before 23 September) and were made redundant or stopped working for them afterwards, they can also qualify for the scheme if they re-employ them.

Neither the employer nor the employee needs to have previously used the CJRS. Further details on eligibility will be provided in the next few days.

What you need to do now

  • Check if your employees are eligible for the scheme, based on the information above.
  • Agree working hours with your employees, so they know if they are furloughed fully or part-time during November.
  • The government will not  pay the job retention bonus in January.

 

 

 

JULY 2020

This is a reminder that you can start to flexibly furlough eligible employees from 1‌‌‌ ‌July onwards.

From 1‌‌‌ ‌July, you can claim a more flexible grant for any employee you have previously received a CJRS grant for, and who now returns to work on reduced hours. You can also continue to claim for employees who stay fully furloughed.

What you need to do next

  • claim for periods ending on or before 30‌‌‌ ‌June, by 31‌‌‌ ‌J‌ul‌y – this is the last date you can make those claims
  • agree the hours and shift patterns that you want your employees to work from 1‌‌‌ ‌July
  • pay your employees' wages for the time they’re in work and apply for a job retention scheme grant to cover the remainder of their usual hours for which they are still furloughed
  • claim for further furlough periods as needed – the first time you will be able to make a claim for days in July will be 1‌‌‌ ‌July.

 

 

AUGUST 2020 : Employer  will still be able to claim the lower of 80% of staff wages or £2,500 a month  BUT from   1 August  employers will pay for their own pension contributions and National Insurance contributions ( the employer share).

 

SEPTEMBER 2020:  reducing the furlough to the lower of 70% or £2,187.50 a month in September

 

OCTOBER 2020:  further reducing the furlough to  the lower of 60% or £1,875 in October, with the scheme closing on 31st October.

 

 

FLEXIBLE FURLOUGH

 

1. Eligibility for flexible furlough

From 1 July 2020 only employees that have been furloughed previously can  be furloughed from 1  July 2020 onward.

 

 2. Procedure for flexible furlough

The employer should discuss with employees ; specifying  which hours they will be expected to work.

The agreement should be confirmed in writing and retained  for five years. 

 

3. Records Keeping

Employers have  to keep records of the number of  hours their employees work and the number of hours that they are furloughed during flexible furlough. We suggest you keep a weekly/ monthly  record sheet/ spread sheet.

 

4. Maximum period of  flexible furlough

The  period that employers claim for must be for a minimum period of seven calendar days and there is no maximum other than the £2,500 cap. The agreement can  be varied   to agree a revised split. 

 

5. Claiming

The  furlough scheme will allow employers to recover the remainder of pay  to a maximum cap. Wage caps are proportional to the hours an employee is furloughed. So for example, an employee is entitled to 40% of the £2,500 cap if they are placed on furlough for 40% of their usual hours. Hence, the employer can recover a  maximum of £1,000  (£2,500x 40% ).

The amount that the scheme will cover will be reduced  from September 2020 as described above.

 

 6. Calculating working hours

There are two different method  that  can be used to work out the employees’ usual hours, depending on whether they work fixed or variable hours.

FIXED hours  : Where the employee’s working hours are fixed the reference period for calculating their hours is the hours they were contracted to work  at the end of the last pay period ending on or before 19 March 2020. This is before the Covid-19 furlough announcement was made.

VARIABLE hours : Where an employee works variable hours  then we  will use the higher of:

  • the average number of hours worked in the tax year 2019 to 2020; and
  • the corresponding calendar period in the tax year 2019 to 2020.

 

 

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Address

109B High Street

Hemel Hempstead

Herts HP1 3AH

Tel: 01442 242491

 

The Brentano Suite

Solar House

915 High Road

London  N12 8QJ

Tel: 0208 343 6091

 

 

 

 

 

 

Making an appointment

If you have an enquiry or wish to make an appointment please contact us:

 

London : 0208 343 6091

Hemel :  01442 24 24 91

Email: neil@neiltax.london

 

 

 

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