The Coronavirus Job Retention Scheme (CJRS) is coming to an end on 31st October. Until then, the amount that employers will have to contribute is changing.
From 1st July the CJRS entered its second phase, employers were able to bring back employees on a part time basis, The flexible furlough scheme was brought in to help aid people in their return back to work, and give businesses the flexibility to bring back employees as and when needed.
What is changing from August 1st?
From August onwards, the level of support from the grant will be slowly tapered off each month. Throughout August, the government will continue to pay 80% of wages, however employers will be required to pay ER NICs and pension contributions.
From 1st September – the amount the government will pay drops to 70% of wages (up to a cap of £2,187.50) for the hours the employee is on furlough. The Employers must pay ER NICs and pension contributions. They must also top up employees’ wages (by 10%) to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed
From 1st October – the amount the government will pay drops to 60% of wages (up to a cap of £1,875) for the hours the employee is on furlough. The employers must pay ER NICs and pension contributions. They must also top up employees’ wages (by 20%) to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
In his Summer Statement, the Chancellor confirmed that the government is introducing a new Coronavirus Job Retention bonus to reward and incentivise employers who continue to employ their furloughed employees through to the end of January 2021.
What is the Coronavirus Job Retention Bonus?
The Chancellor announced a job retention bonus will be introduced to incentivise businesses to keep those employees who were furloughed once the scheme comes to an end. This will be a one-off payment of £1000 for each employee, irrespective of their earnings.
To claim the bonus, the employee must be continually employed until 31st January 2021 and meet the Lower Earning Limit of £520 per month on average.
The bonus will be paid directly to employers in February 2021 and they are not obliged to pass on any bonus to the employee.
How will this bonus affect employers?
This bonus will no doubt be welcomed by those employers who had already planned to bring back their furloughed staff to work over the next few months. Although not a huge sum of money, this bonus may also help those businesses who deferred tax payments during the pandemic, and pay VAT payments due at the end of March.
However, for some businesses this bonus may not be enough of an incentive to cover the costs of employing staff until the end of January, especially for those experiencing a continued downfall in trading.
What other measures are being introduced?
Apprenticeships – A payment of £2,000 will be available to employers for each new apprentice they hire under the age of 25. For apprentices aged over 25 there will be a payment of £1,500 offered.
The KickStart Scheme – A £2bn kickstarter scheme has been announced to help create “hundreds of thousands” of 6 month work placements for those aged between 16-24. The fund will cover the National Minimum Wage for each placement for 25 hours a week.
Vat Cuts and ‘Eat Out to Help Out’ scheme – The government has implemented measures to help the hospitality industry recover after months of closures. Vat has been cut from 20% to 5% and the ‘eat out to help out’ scheme will give a 50% discount to consumers on food at participating restaurants. This is available at participating restaurants Monday – Wednesday throughout August.
Stamp Duty Holiday – The Government has also already introduced a stamp duty holiday for the next six months designed to help stimulate the housing market across England. Under this new measure stamp duty will only be paid on those properties over £500,000.
Please contact a member of the team to discuss the support options available to you.