1st June 2020
Coronavirus : Update on Job Retention Scheme
Details on the furlough scheme from August 2020 and reporting employees wages to HMRC
The UK’s coronavirus furlough scheme will finish at the end of October. From August, employers must pay National Insurance and pension contributions, then 10% of pay from September, rising to 20% in October. Also, workers will be allowed to return to work part-time from July, but with companies paying 100% of wages.
From 1 July, businesses will be allowed to bring furloughed employees back part-time, a month earlier than previously announced. The move is aimed to help support people back to work, the government said.
It will be down to individual firms to decide what part-time means. They will be able to set the hours and shift patterns staff will work when they return, but companies will have to pay wages while they are in work.
During August the government will pay 80% of wages up to a cap of £2,500. Employers will have to pay NI and pension contributions. For the average claim, that’s 5% of the gross employment costs the employer would have incurred had the employee had not been furloughed.
In September, the government will cut its grants to 70% of wages up to a cap of £2,190. Employers will pay NI and pension contributions and 10% of wages to make up the 80% total up to a cap of £2,500. That works out at 14% of the average gross employment costs the employer would have incurred.
In October the government grant will be cut to 60% of wages up to a cap of £1,875. Employers will pay NI and pension contributions and 20% of wages to make up the 80% total up to a cap of £2,500. That’s 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.
Reporting employees’ wages to HMRC when you have claimed through the Coronavirus Job Retention Scheme.
If you’ve claimed a grant through the Coronavirus Job Retention Scheme, you should check if you need to report payments on the PAYE Real Time Information system, as this will depend on whether you are using the grant to:
- pay wages
- reimburse wages that you’ve already paid
If you’re claiming a grant through the scheme, you need to go through the following steps:
1.Check if you can claim.
2.Check which employees you can put on furlough.
3. Calculate 80% of your employees’ wages.
4. Claim for your employees’ wages.
5. Report a payment in PAYE Real Time Information.
If you are using the grant to pay wages, to reimburse wages already paid or if you have not paid your employee’s full wages there a number of steps you need to take. Please view the nibusinessinfo page here for instructions on what to do next.