As anticipated, the Chancellor Rishi Sunak announced further updates to the CJRS and SEISS on Friday. The changes provide much needed clarity to employers, with further detail to follow, but the key points are as follows:
- The CJRS will close to new entrants from 1 July 2020. Given that employees must have completed the minimum furlough period of 3 weeks, the last day on which employees can be placed on furlough is 10 June 2020;
- From 1 July 2020, furloughed employees will be permitted to return to work part time “flexible furloughing” – a month earlier than previously announced. It is up to employers to decide the hours and shift patterns, but employers must pay for any hours worked and can then claim for remaining hours not worked through the CJRS. Employers must agree the flexible furloughing arrangement with employees and confirm the agreement in writing;
- In June and July 2020 the current CJRS payment will continue at a rate of 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions;
- From August 2020 the CJRS payment of 80% of wages up to a cap of £2,500 will continue but employers will pay ER NICs and pension contributions;
- From September 2020 the CJRS payment will drop to 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500;
- From October 2020 the CJRS payment will reduce to 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. The CJRS closes on 31 October 2020.
- Eligible individuals can continue to apply for the first SEISS taxable grant until 13 July 2020. The grant is worth 80% of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, capped at £7,500 and paid into their bank account within six working days of completing a claim;
- Applications for the second taxable grant will open in August 2020, worth 70% of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total;
- The eligibility criteria are the same for both grants, and individuals will need to confirm that their business has been adversely affected by coronavirus. An individual does not need to have claimed the first grant to receive the second grant: for example, they may only have been adversely affected by COVID-19 in this later phase.
Aisling’s previous article on the Job Retention Scheme can be found here.
This article has been produced for general information purposes and further advice should be sought from a professional advisor. Please contact our Employment team at Cleaver Fulton Rankin for further advice or information.