Coronavirus Job Retention Scheme - aka the furlough scheme October 2020 Changes
Posted on 9th October 2020 at 21:19
From 1 October, HMRC will pay 60% of usual wages up to a cap of £1,875 per month for the hours furloughed employees do not work. Employers will continue to pay furloughed employees 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. Employers will need to fund the difference between this and the CJRS grant themselves.
The caps are proportional to the hours not worked. For example, if an employee is furloughed for half their usual hours in October, employers are entitled to claim 60% of their usual wages for the hours they do not work, up to £937.50 (half of £1,875 cap).
Employers must still pay their employees at least 80% of their usual wages for the hours they don’t work, so for someone only working half their usual hours they’d need to pay them up to £1,250 (half of £2,500 cap), funding the remaining portion themselves. For help with calculations, you can search 'Calculate how much you can claim using the Coronavirus Job Retention Scheme' on GOV.UK. Employers will also continue to pay furloughed employees’ National Insurance and pension contributions from their own funds.
The Job Retention Scheme ends on 31 October 2020.
What does this mean for small business owners and directors?
If you still have staff on furlough be aware that you have 19 working days until the scheme ends: if you do not have a plan, make this a priority
Remember any restructure must follow a fair and robust process and you must consult with employees in a timely way to avoid risk
Remember that reputation is everything and change is particularly difficult in the current climate. Consider communications carefully
Consider flexing your workforce: look at options and consider the Job Support Scheme. Details on our website.
Consider what other grants and support are available for your business
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