Please join us in welcoming Ryan to team Blu Sky!…
The flexible furlough: part-time payments through CJRS
Further details on the practical operation of part-time furlough in tandem with the coronavirus job retention scheme (CJRS) were released late on Friday. We know that from 1st July any employee on furlough can return to work part-time, whilst claims can be made under CJRS for the time they are not working.
Good record keeping
Before we get onto the main event, let’s first again underline the vital importance keeping good quality records of any claims – for at least six years. HMRC are aware that the process is very open to fraudulent claims/ We’re confident that they will follow up on their promise of a ‘second wave’ of checks in the future to validate any claims which they may find suspicious, or indeed many that may throw up an anomaly based on data validation.
Any Blu Sky client for whom we’re processing claims will have completed a claim template so we have consistent, quality information, but in the event of an enquiry this may also need backing up by relevant letters to the employees and other work records.
Part-time furlough payments
We know that from 1st July any employee on furlough can return to work part-time, whilst claims can be made under CJRS for the time they are not working. As a very brief introductory example, that means if someone comes back to work 2 days out of 5, the employer must pay the full wages for those 2 days, then claim and pay over 80% of the wages for the remaining 3 days.
So far so simple, but the devil is in the detail. So what changes in the detail:
- You’ll only be able to claim for employees that have already been furloughed for at least 3 weeks by 30th June, so anyone not yet already on furlough is out of the scheme. The only exception is for an employee returning from statutory parental leave.
- For any furlough period starting from now to the end of June, the minimum period which would be subject to a CJRS claim would still be three weeks. For example of anyone has been on furlough, come back to work for a week, and restarts furlough on Monday 15th June, that furlough period must last until at least 4th July for any CJRS claim to be valid.
- You cannot, in any one claim, claim for more employees than in any claim made beforehand. For example, you furloughed 4 staff in March/April, 5 in May, and 4 in June. From July onwards the most you can claim for is 5.
- You can bring the employees back for any amount of time, with any work pattern, and claim CJRS for the hours they would have worked under a normal work pattern.
- The periodic maximum (£2,500 for a month) reduces in line with the reduced hours/days within a claim.
- You cannot make a claim that crosses calendar months.
- The minimum claim period has reduced from 21 days to 7, unless claiming for the first or last few days of the month.
- Claim periods should continue to match (wherever possible) to your payroll periods. Claim periods cannot overlap.
- The basis of the claim (items included in the claim) remain the same until 1st August , at which point the employer starts covering pension contributions and employers national insurance.
- Employment rights continue and holiday pay continues to accrue.
- Employees can take holiday or attend training during furlough, but wages must be topped up to 100% during those days.
Since our last blog on the topic, we can confirm that there is now an amendment process for prior over-claims through the portal. Under-claims must continue to be processed by telephone and will be subject to a separate confirmation reference. We’d strongly recommend, particularly when we get into July, that cash-flow issues permitting you don’t make a claim until you are certain of your employees working patterns and hours.
If you are altering the terms of your employees furlough, it’s wise to follow that up in writing. We strongly advise you take employment law advice if this is the case.
It’s time for a little celebration as we welcome a new person to team Blu Sky! Simon has joined us as a Client Payroll Specialist.
As every business owner and most employees, find themselves working from home more than ever before it is important the that the tax implications of this new way of working are understood.