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1 June 2020

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The Future of Furlough

Posted by: Russell Brown

On Friday, the Chancellor, Rishi Sunak, announced details of changes to the Coronavirus Job Retention Scheme (CJRS) which can be summarised as follows:

  • To be eligible under the new CJRS which will start on 1st July, employees will have to have been placed on furlough on or before 10th June (ie to ensure they have been furloughed for three weeks before 1st July).
  • From 1st July 2020 employers will be able to bring furloughed employees back to work part-time (duration to be determined at employers’ discretion) and then move them back on to furlough in order to provide the much needed flexibility many employers will need as business attempts to get back to normal. Employers will still be able to claim under the CJRS for employees’ normal hours not worked but will have to pay in full (100%) for any hours worked and will be responsible for tax and NIC’s on those payments.
  • From 1st August 2020 employers will be required to start contributing to the CJRS by paying NIC’s and pension contributions.
  • From 1st September 2020 employers will be required to contribute 10% of employees’ salaries with the government paying the additional 70% (up to a maximum of £2190).
  • From 1st October 2020 employers will be required to contribute 20% of employees’ salaries with the government paying the additional 60% (up to a maximum of £1875)
  • On 31st October 2020 the CJRS will close.

Further guidance on the CJRS along with advice for employers on how to calculate claims will be published on 12th June. More detail will also hopefully be provided once we have sight of the updated HMRC Employer’s Guidance and Treasury Direction in the next few days.

To be eligible for the grants under the CJRS employers will need to implement new furlough agreements recording the new arrangements with employees confirming that agreement in writing.

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Russell is a Partner and Head of Glaisyers' Employment Team.

Russell Brown - Partner

To discuss how Glaisyers can assist you contact Russell Brown on Russell.Brown@glaisyers.com or via 0161 832 4666.

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