Hello everyone…
Yes, it’s a Thursday update this week rather than Friday.
No particular reason other than I really need to share some
information with you about the Job Retention Scheme which is changing from 1st
July.
Job Retention Scheme
I’ve written about the changes to the scheme before but I
want to give you a few more details because it’s… well, complicated.
So, I’ve explained in the past about the introduction of the
Flexible Furlough from 1st July onwards. Essentially this
means that an employer can bring back a staff member part time and pay them for
the hours worked, whilst the government will pay 80% of the salary for the time
when the team member couldn’t work.
There’s been a fair amount of detail put out by HMRC about
all this so I thought I’d just give you more of the highlights… if they can be
called that!
Claim Periods
First of all in the new scheme claim periods can’t overlap a
calendar month.
This is because the scheme is changing on the 1st
of each month starting from 1st July.
·
1st July – part-time furloughs start
·
1st August – employers can’t claim NI
or pension payments
·
1st September – claim amount drops to
70% of salary – employers make up the rest
·
1st October – claim amount drops to
60% of salary – employers make up the rest
So, all claims for staff on furlough in June can only run up
to 30th June and be claimed by 31st July… even if someone
continues to be furloughed full time in June and July. In other words
there will be a claim for furloughed days in June and another one for the
furloughed days in July.
Up until now we’ve tried to keep the furlough claims (wherever
we can) in line with your pay periods – we may not be able to do that in
future.
For claims starting on or after 1st July – the
claim can only start and end in the same calendar month. Claims have to
be for at least seven days – unless the period of the claim includes either the
first or last day of the calendar month and the period immediately before it
has already been claimed for.
Essentially this means that the furlough calculations (which
we thought were complicated before) are about to get hugely complicated!
Other requirements
There’s quite a lot to the small print. I’ve read
through the detail and pulled out the most important bits… but there’s lots
more. Have a look at these requirements:
•
You can only make one claim for any period so
you must include all furloughed or flexibly furloughed employees in one claim
even if you pay them at different times
•
If you make more than one claim, your subsequent
claim cannot overlap with any other claim that you make
•
Where employees have been furloughed or flexibly
furloughed continuously (or both), the claim periods must follow on from each
other with no gaps in between the dates
•
You can claim before, during or after you
process your payroll; you can usually make your claim up to 14 days before your
claim period end date and do not have to wait until the end of a claim period
to make your next claim
•
When claiming for employees who are flexibly
furloughed, a claim should not be made until you are sure of the exact number
of hours, they will have worked during the claim period
•
This means that you should claim when you have
certainty about the number of hours employees are working during the claim
period
Phew!
I need to lay down in a darkened room.
You can read more about the scheme (if you want to or you
have trouble sleeping) here:
Extra record keeping
When first furloughing employees you will have had a chat
with them and given them a letter confirming the change to their contract.
If you are going to furlough staff part time a new written
agreement will need to be in place confirming the new arrangements.
I can’t give you a sample of this agreement (not being an HR
lawyer and all that) so please do get some advice about this if you need it.
There’s also some extra record keeping relating to the
payroll – of course we’ll look after this bit if we’re running your
payroll. This is what we’ll keep a records of:
•
The usual number of hours each employee would
normally work in the claim period.
•
The number of hours each employee will work in
the claim period, and
•
The number of furloughed hours the employee has
been furloughed for in the claim period
The real reason I’m telling all this is because, of course,
we’ll help you through this process and will continue to file claims for you –
but we’ll need extra information from you. We’ll try to get all the
information from you in one go but as we may just need to come to you more than
once as we get used to the new calculations and the info that’s needed.
What I’m really doing is asking for your patience as we get
to grips with the new calculations!
Self Employment Income Support Scheme
Last thing for today…
HMRC have published the first minor update to their SEISS
guidance.
They have confirmed that to qualify for the second grant
under this scheme, businesses had to be adversely affected on or after 14 July
2020, together with all of the other criteria relating to the first grant.
It’s a minor point but if HMRC are flagging it up they must
think it’s important.
I think that’s enough for today!
As always, any questions please do get in touch and we’ll
answer any specific questions that you have about your own situation.
See you soon!
Rowena
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