Furlough Scheme Tapering and How It Impacts Your Business
If your business has been using the Coronavirus Job Retention Scheme (CJRS) to furlough staff in recent months, are you aware of and prepared for its planned tapering?
Dragon Argent has prepared a short summary below to inform your decision making as government support begins to be withdrawn:
• Since 1st July , furloughed staff are able to work part-time, with employers paying wages in proportion to hours worked, and employers being able to claim under the CJRS for employees’ wages for the normal hours that they do not work.
• During July, the funding available from the scheme for the time when the employee is not working will remain the same, at 80% of employees’ wages up to a maximum of £2,500 per month, plus the employer national insurance contributions (NIC) and the minimum automatic enrolment employer pension contributions due on the subsidised wage.
• From 1st August, the scheme will continue to cover 80% of employees’ wages (for the hours they do not work), up to a maximum of £2,500 per month, but the employer will be responsible for paying the employer NIC and employer pension contribution.
• From 1st September 2020, the scheme will cover 70% of employees' wages (for the hours they do not work), up to a maximum of £2,187.50. As a minimum, the employer must pay 10% of the employee's wages, so the employee continues to receive 80% of their normal wages, up to the maximum of £2,500 (although employers may top this up further). The employer will be responsible for the employer NICs and pension contributions.
• From 1st October 2020, the scheme will cover 60% of employees' wages (for the hours they do not work), up to a maximum of £1,875. As a minimum, the employer must pay 20% of the employee's wages, so the employee continues to receive 80% of their normal wages, up to the maximum of £2,500 (although employers may top this up further). The employer will be responsible for the employer NICs and pension contributions.
For small businesses particularly, navigating these changes to the CJRS can be complex and time consuming.
Dragon Argent are here to support your business as we all transition through this period. For everything from advice on how to continue to utilise the CJRS to match the needs of your business through to making applications and drafting communications with staff, please contact us.